Photo: Craig T Fruchtman/Getty Images
Aby Rosen has lost the Chrysler Building. Yesterday, a Manhattan judge terminated RFR’s ground lease and ordered RFR Holdings, which Rosen leads alongside Michael Fuchs, to vacate the building. She also dismissed the developer’s claims against Cooper Union, the private art and engineering college that owns the land beneath the iconic tower.
Rosen had been struggling to hold onto the Art Deco skyscraper for months, after falling behind on its ground lease payments last spring — the latest in a string of high-profile losses that RFR has suffered, which include the Gramercy Park Hotel and Lever House (both ground leases like the Chrysler). Cooper Union moved to evict RFR in September — about four months after Rosen had stopped paying the ground lease. RFR then filed a lawsuit against Cooper Union, claiming, among other things, that Cooper Union’s handling of an Israeli-Palestine campus protest had “profoundly disturbed” members of the real-estate community, resulting in tenants vacating tens of thousands of square feet of office space. On October 31, a judge gave Cooper Union control of the building, allowing it to collect rents and lease the space, but RFR remained on the premises, pending a final judgment.
While some details remain to be worked out — including how much RFR will have to pay Cooper Union — yesterday’s ruling means that Cooper Union, which has been handling leasing with Savills and Cushman & Wakefield since November, can now look for a different partner. “RFR could never overcome the basic fact that they were in arrears to the tune of $21 million and had not paid rent in months,” John Ruth, Cooper Union’s vice-president of finance and administration, wrote in a statement.
RFR, contacted yesterday evening, has not yet responded to a request for comment. The real-estate firm could still appeal the decision but would need to seek a temporary injunction to avoid eviction.
When Rosen bought the Chrysler’s ground lease in 2019, partnering with Austrian firm Signa Holdings, it was widely considered to be a risky move — while they paid just $151 million, a fraction of the $800 million the building had last sold for — the ground lease was quadrupling from $7.78 million to $32.5 million a year. The rents in the building weren’t high enough to cover the ground lease payments, and that was before the pandemic hit, tanking Manhattan office rents. Rosen banked on revamping the aging skyscraper into a trophy property that would command significantly higher rents — a feat that RFR, which also repositioned the Seagram Building, is famous for. That bet also seems to have relied on the assumption that he would get Cooper Union to renegotiate the lease, something that the previous owner, Tishman Speyer, believed the college would never do. Rosen and Cooper Union did discuss several lease modifications after the pandemic hit — sources familiar with the negotiations said that one involved paying a $300 million lump sum that would bring down the monthly payments to a sustainable level. But a deal was never reached, and in November 2023, Signa fell into bankruptcy, leaving RFR to shoulder the costs of carrying the building alone. Earlier last fall, a source told New York Magazine that RFR was likely losing about $1 million a month on the building.