NYC's Iconic Chrysler Building Faces Foreclosure Amidst Office Market Collapse

NYC's Chrysler Building Faces Foreclosure Amidst Office Market Collapse

The Chrysler Building, a long-admired gem of New York City's skyline, could be the latest victim of the nationwide office collapse.

The lease between Cooper Union, which owns the land on which the building sits, and RFR Holding was terminated last week. Cooper Union, a private college in the city, told The Wall Street Journal that RFR Holding had not paid its rent since May and owed it $21 million.

"As a result of their nonpayment, they are in default of the ground lease agreement," John Ruth, Cooper Union's vice president of finance, said in a statement. A termination notice was sent on September 13 and went into effect on September 27, the statement said.

RFR Holding, a private real-estate-management company, says it is "known for owning and managing some of Manhattan's most prestigious signature office properties." But attorneys representing RFR told the Journal that the company intended to hold on to the building and was prepared to go to court if necessary.

The office market has struggled to recover since the pandemic, with commercial foreclosures soaring. ATTOM, a real-estate-data provider, found foreclosures jumped 117% year over year from March 2023 to the same time this year. In June this year, there were 647 commercial foreclosures, up from 141 in May 2020.

New York, along with California, Texas, New Jersey, and Florida, saw the most commercial foreclosures in June. Experts predicted the drop in office values could be as bad as or worse than the 2008 crash. What that means for the iconic Chrysler Building — and the rest of the New York City skyline — remains to be seen.