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RFR Evicted From Chrysler Building, Ending Feud With Cooper Union

An intense legal battle over ownership of one of New York City’s most iconic buildings has come to a close with a court order issued Wednesday.

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The Chrysler Building

RFR’s ground lease at the Chrysler Building, the 77-story art deco skyscraper in Midtown Manhattan, has been terminated after New York State Supreme Court Justice Jennifer Schecter ruled in favor of its landlord, private college Cooper Union.

The judge ordered RFR’s ejection from the 1.2M SF property, ending a legal dispute over $21M in unpaid rent. Control of the building fully returns to Cooper Union, which issued a lease termination in September on the grounds that RFR had defaulted on the ground lease. 

RFR's ownership entity sued to block the eviction, claiming mismanagement of the property because of the school’s handling of campus protests over the conflict in Gaza.

“Despite their desperate attempts to shift the focus, the problem has always been their continued failure to meet their obligations,” The Cooper Union Vice President of Finance and Administration John Ruth said in a statement provided to Bisnow. “We appreciate the court validating our position.”

Schecter is also expected to award a yet-to-be-determined amount in damages that RFR will have to pay to Cooper Union for the months of unpaid ground rent during litigation, as well as paying the school’s attorneys fees.

An RFR spokesperson declined to comment to Bisnow.

Cooper Union in the fall tapped Cushman & Wakefield to manage the building after Schecter ruled that RFR had to cede control of the landmark to the university.

Ruth said Thursday that Cooper Union plans to work with Savills, Cushman and its own team to “assume full management of the property so we can implement a long-term plan to improve the tenant experience and maximize the building’s value.” 

A spokesperson for Cushman declined to comment. 

The legal saga took place against a backdrop of failed negotiations over the property’s expensive ground lease, which started at $32.5M a year when RFR and the now-bankrupt Austrian investment firm Signa Holdings acquired the building in 2019 for $150M.

Payments were due to escalate to $41M a year in 2028 — a driving force behind the huge discount former owner Abu Dhabi Investment Council had to swallow after paying $800M for a 90% stake in the building in 2008.

Signa entered talks to sell its stake in late 2023 when it filed for insolvency. Its leader, René Benko, was arrested in Austria this month for allegedly attempting to conceal assets and tampering with evidence during an ongoing fraud investigation.

RFR has had its own share of troubles. It invested more than $170M in Chrysler Building upgrades but faced complaints of rodents and cracks in the ceiling of the lobby from its office tenants, The New York Times reported in July. A spokesperson told Bisnow last year that millions more still needed to be spent to complete the building's refurbishment.

The sprawling portfolio amassed by RFR partners Aby Rosen and Michael Fuchs has been springing leaks.

Last year alone, it was hit with foreclosure notices at 475 Fifth Ave., the retail units at 188 E. 78th St., the office building at 285 Madison Ave. and the office building at 90 Fifth Ave. The loans it was accused of defaulting on totaled more than $1B.

But RFR has managed to hang on to some signature properties and generate cash from high-profile sales. In December, a special servicer filed to foreclosure on RFR at a 42-story office tower in Battery Park City after claiming it failed to pay off its $180M mortgage. RFR landed a three-year extension there at the end of the year, also extending its loans at 670 Sixth Ave. and 150 E. 72nd St.

It also sold 980 Madison Ave. to Bloomberg Philanthropies for $580M in June and has nearly filled up the Seagram Building's office space on Park Avenue at top-of-the-market rents.