Abu Dhabi Acquires a Stake in Chrysler Building

By Charles V. Bagli
The government of Abu Dhabi bought a 90 percent stake in the landmark Chrysler Buildingon Tuesday for $800 million from German investors and Tishman Speyer Properties.
You would think that Abu Dhabi got a controlling interest in New York’s Art Deco masterpiece for that kind of money. But you would be wrong.
Despite having only a minority holding, Tishman Speyer Properties will continue to control the property, much as it has since 1997. That is because it controls the land beneath the 77-story tower with the stainless steel crown, gargoyles and elevator cabs that evoke the chrome laden autos of years gone by.
Tishman Speyer Properties did not return calls requesting comment and the often secretive Abu Dhabi Investment Council, an arm of the Gulf emirate government, was also mum. Teresa Miller, a spokeswoman for Prudential Real Estate Investors, confirmed on Wednesday that “we no longer own a 75 percent stake in the Chrysler Building.” She declined to disclose the sale price.
Real estate executives familiar with the transaction said the other 15 percent was purchased from Tishman Speyer. The total price was $800 million, or 166 percent more than the $300 million the German investors paid in 2001.
In a separate deal, the Abu Dhabi Investment Council is negotiating to buy the retail space in the seven­-story glass Trylons, a pavilion, that Tishman Speyer built next to the Chrysler Building.
Jerry I.Speyer , the chairman of Tishman Speyer, and its partner Travelers Group, bought the skyscraper at 42nd Street and Lexington Avenue and the adjoining Kent Building in 1997 for $220 million. Mr. Speyer outwitted competing bidders for the property by pre-emptively securing a deal with Cooper Union for the Advancement of Science and Art, which owned the land underneath the tower.
Although the Chrysler Building’s lobby featured African marble and chrome and the Sky Club on the 66th floor offered spectacular views, it had a run down feel to it. Tishman Speyer poured $100 million into renovations.
Less than four years later, Travelers sold its 75 percent stake for $300 million to a real estate fund for German investors called TMW. Prudential later acquired TMW, selling the stake in the Chrysler Building on Tuesday. The funds generally buy assets for five to seven years and are not interested in being long term owners of real estate.