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Real-estate moguls are snatching up New York City's landmark skyscrapers. By Cheryl C. Effron
In New York, even history has to earn its keep. After decades of devoting themselves to the construction of undistinguished glass office buildings, a handful of New York City's top realestate developers are now buying up landmark skyscrapers like hyper-competitive monopoly players on a rainy afternoon. All across Manhattan, vintage spires and imposing addresses are changing hands for record prices. In a most unlikely reversal, developers who a decade ago dismissed landmarks as money-losing propositions, now covet them as status souvenirs capable of ennobling their portfolios. Moreover, they are investing hundreds of millions of dollars to upgrade the neglected towers. Buildings that have been recently acquired or overhauled include the Chrysler (William Van Alen, 1930), Woolworth (Cass Gilbert, 1913), Flatiron (D.H. Burnham & Co., 1902), Fuller (Walker & Gillette, 1929), Daily News (Howells & Hood, 1930), McGraw-Hill (Hood, Godley & Fouilhoux, 1931), Empire State (Shreve, Lamb, & Harmon, 1931), and Helmsley (Warren & Wetmore, 1929) buildings, and parts of Rockefeller Center (Hood, Godley & Fouilhoux). One veteran broker likened the surge of interest to a "feeding frenzy."
Why the change of heart? For one thing, developers no longer see large-scale renovations as onerously expensive. On the contrary, as land becomes scarcer and building costs soar, renovating a prominently located office tower has come to seem a relative bargain. What's more, the buyers shrewdly discern that most landmark skyscrapers have languished as underperforming assets. In some cases, like the Woolworth Building and Lever House (1952), a single company occupied most of the space, so the owners had no incentive to redevelop the building. Other buildings simply failed to generate enough income to service their debt, much less pay for the improvements that lead to higher rents. Either way, developers with the funds, or access to funds, are now racing to renovate and increase the cash flow.
Bidding wars
The Chrysler Building may be one of the most recognized high-rises in the world, but it had lost money since at least the early 1990s, and the art-deco tower had lapsed into a sad state of disrepair. Its owner,...