An iconic gem of New York City's skyline is the latest victim of the office collapse
Roy Rochlin/Getty Images
- The Chrysler Building, a renowned gem of NYC, is the latest victim of the office apocalypse.
- Cooper Union, the property owner, told the Journal that RFR Holding owed $21 million in rent.
- Commercial foreclosures surged post-pandemic, and the market is still struggling to recover.
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, The Wall Street Journal reported.
Cooper Union, a private college in the city, told the 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 shared with Business Insider. A termination notice was sent on September 13 and went into effect on September 27, the statement said.
The website for RFR Holding, a private real-estate-management company, still features the Chrysler Building. The firm says it is "known for owning and managing some of Manhattan's most prestigious signature office properties, including 375 Park Avenue (The Seagram Building) and 405 Lexington (The Chrysler Building)." The firm says it has a "proven track record of adding significant value to acquired properties."
Business Insider could not immediately reach RFR Holding or its attorneys on Thursday. 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.
"While RFR prefers to resolve this matter amicably, and privately, if possible, it is also prepared for the alternative, if necessary," the lawyers, Terrence Oved and Darren Oved, told the Journal.
Commercial foreclosures have soared since the COVID-19 pandemic, which ushered in a monumental shift in workplace culture, launching the work-from-home and hybrid-work era. The commercial-office market has struggled to recover since. ATTOM, a real-estate-data provider, found foreclosures jumped 117% year over year from March 2023 to the same time this year.
The picture isn't any prettier if you zoom out. In May 2020, there were 141 commercial foreclosures. In June this year, there were 647, a recent ATTOM report said. New York, along with California, Texas, New Jersey, and Florida, saw the most commercial foreclosures in June, the report added. Morgan Stanley said in February that office buildings were facing a 30% peak-to-trough correction in office prices.
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.