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From Bisnow
March 1, 2024 Sasha Jones, New York City
The Chrysler Building is attempting to reposition itself by marketing to high-end retail tenants.
The iconic Chrysler Building has signed its first tenant following a retail makeover that aims to bring an air of modern luxury into the challenged art deco landmark.
WatchHouse, a British coffee shop that recently opened its first U.S. store at 660 Fifth Ave., will open its second location at the base of the Chrysler Building. It signed a lease for 2K SF on 43rd Street, across from an entrance to Grand Central Terminal.
Retail by Mona CEO Brandon Singer, who led broker teams that represented the tenant and landlord RFR, said the lease reflects the vision for the building’s retail.
“It’s creating a destination for retail that is a little bit outside of the box, given the amazing asset,” Singer told Bisnow. “With all the dense office buildings in this area, this will help the people coming back to work. Give them an experience that they may not have had in the past.”
As tenants opt for amenity-rich, Class-A towers, owners of historic buildings like the Chrysler Building are attempting to find a role for their properties to play in a remote work world.
Singer’s team is marketing several spaces on the 1,046-foot-tower’s ground floor, in addition to storefronts on the arcade level, which totals 30K SF alone. RFR is also considering adding retail use to the second floor.
It is reinventing the Cloud Club lounge on the 61st and 62nd floors as part of a renovation that RFR co-founder Aby Rosen told Bloomberg in 2020 would cost at least $200M.
“We wanted to create something nice — food, wine, dry cleaning, shavers, hairdressers — so tenants have a reason to stay longer instead of running out,” Rosen told Bloomberg at the time.
Singer declined to provide further details on the building’s upgrades. RFR declined to comment.
The Chrysler Building previously housed retail tenants that served daily Midtown commuters, including a barbershop, a shoeshine, a dry cleaner, a locksmith and an optometrist — but all of them vacated in 2020. In its next chapter, the building will focus on higher-end tenants that could appeal to shoppers outside of the 9-to-5 work schedule, Singer said.
Most recently, the building, once the world’s tallest, has been caught in the collapse of Austrian property company Signa. The firm, founded by investor René Benko, filed for insolvency in November, and it is looking to unload its 50% stake in the skyscraper.
Rosen had been in talks to renegotiate the building’s long-term ground lease with The Cooper Union since he and Signa acquired the leasehold in 2019. Signa’s insolvency complicated those efforts, and RFR is on the hook for more than $31.5M in annual ground rent payments, the New York Post reported in November.
The Chrysler Building’s retail repositioning is similar to that of its rival Empire State Building. Empire State ownership added a three-story Starbucks Reserve store to its retail base in 2022. In 2019, it debuted a $165M redevelopment, which added a museum and made improvements to its observatory.
Empire State Realty Trust, the owner of the Empire State Building, said in its annual report that the observatory generated $129.4M in revenue, a sixth of the REIT’s total from last year. The 91K SF of retail in that building was 76.4% leased at the end of 2023.
This article is from Bisnow.com.