Judge Orders RFR to Cede Chrysler Building to Cooper Union

As reported by Bisnow, a Manhattan judge has ruled that Cooper Union can take over rent collection and management of the Chrysler Building due to $21M in unpaid ground rent by RFR Holding.

The Ruling

The Chrysler Building, a 77-story Art Deco icon at 405 Lexington Ave., has become a battleground between RFR Holding, led by Aby Rosen, and Cooper Union, which owns the land beneath it. 

Judge Jennifer Schecter ruled against RFR’s arguments regarding improper lease termination notification and rent suspension due to external campus protests, calling the defense insufficient.

The decision follows RFR’s legal challenge to void the lease termination, which the judge rejected. Cooper Union plans to work with Cushman & Wakefield (CWK) to optimize the landmark building’s operations and revenue, a crucial funding source for the school.

Postgame Interviews

RFR expressed concern over being removed from managing the building, highlighting the potential impact on the ongoing multi-million-dollar restoration efforts. 

A spokesperson emphasized RFR’s extensive investments in upgrades, including modernized office spaces and the refurbishment of the historic Cloud Club on the 61st floor.

Meanwhile, with Cushman & Wakefield stepping in as the new property manager, Cooper Union aims to craft a strategy to bolster the building’s value amid challenges like tenant dissatisfaction and vacant retail spaces. 

Vice President John Ruth noted the court recognized the harm caused by RFR’s actions, affirming the college’s right to the building’s rental income, essential for its operational funding.

Historical Context

RFR, in partnership with Signa Holding, acquired the Chrysler Building in 2019, with RFR paying $150M for its share. The iconic tower has since faced numerous difficulties, including rising ground lease payments and maintenance issues reported by office tenants.