Chrysler Building May Be Redeveloped As Hotel, Reports Say

MIDTOWN MANHATTAN, NY — The new owner of Midtown Manhattan's iconic art-deco skyscraper the Chrysler Building might convert a portion of the tower into a hotel, according to reports.

Developer Aby Rosen told Bloomberg that he is considering redeveloping the Lexington Avenue tower. Rosen's firm RFR Holdings reached a deal with Tishman Speyer and an Abu Dhabi government fund to buy the Lexington Avenue skyscraper for a little more than $150 million.

Converting the aging skyscraper may come with some development challenges, Bloomberg reported. Floors currently used as offices generally have layouts that don't convert well into residential use and the building's lobby is a protected landmark, according to the report.

The Chrysler Building's sale to RFR Holdinds represents a huge loss for the sellers, which bought a controlling stake in the tower for $800 million in 2008.

While $150 million is an enormous sum of money, the deal represents a bargain for Rosen —especially when compared to some of the more outrageous real estate deals cut in New York. Billionaire hedge funder Ken Griffin's purchase of a $238 million penthouse in the 220 Central Park South has city politicians calling for a Pied-a-Terre tax.

The aging skyscraper's troublesome ground lease is likely the reason for its underwhelming performance on the sales market, the Real Deal reported. The Chrysler Building's owners are required to pay landowner Cooper Union $32.5 million and the rent will increase to $41 million in 2028, real estate publication the Real Deal first reported.