Tishman Speyer, PSP Investments Finalize $235 Million Chrysler Building Ground Lease With Cooper Union

Tishman Speyer and The Cooper Union for the Advancement of Science and Art announced Oct. 7, 2026, that they have finalized a ground lease for the Chrysler Building, the 77-story office tower at 405 Lexington Avenue in Manhattan's Grand Central submarket. Tishman Speyer, joined by multiple global institutional investors with the Public Sector Pension Investment Board (PSP Investments) as a lead investor, holds the 150-year lease, which includes an investment of $235 million and ground lease payments to Cooper Union.

The partners will deploy 100 percent equity to finance the ground lease and its redevelopment plan, the firms said. The program is intended to reposition the roughly 1.3 million-square-foot tower as what Tishman Speyer described as Manhattan's most distinctive new boutique office building.

Chrysler Building Ground Lease Terms and Capital

Under the arrangement, Cooper Union retains ownership of the land beneath the building, while Tishman Speyer and its partners control the property through the 150-year lease. The $235 million investment covers the ground lease and the planned redevelopment. Ground lease payments to Cooper Union are in addition to that investment. The transaction is structured as a long-term ground lease rather than a conventional fee-simple sale.

The $235 million figure equates to roughly $181 per square foot when measured against the building's 1.3 million square feet. That is a comparison of invested capital to building area, not a purchase price or valuation.

The Chrysler Building is located on Lexington Avenue between 42nd and 43rd Streets, with direct access to Grand Central Terminal. Designed by William Van Alen, the tower opened in 1930 and, at 1,046 feet, was the world's tallest building at the time. It was originally built to house the Chrysler Corporation, which was headquartered there for more than two decades.

Cooper Union was advised on the matter by Steve Klein, a partner at Gibson Dunn, and David Heller, vice chairman of the Capital Markets Group at Savills North America.

Cooper Union's Land Ownership and Scholarship Plan

Cooper Union, a private college founded in 1859 by inventor, industrialist and philanthropist Peter Cooper, has owned the land beneath the Chrysler Building since it was granted to the institution by Cooper's children in 1902. The land is intended to serve as a permanent source of financial support for the school's mission, according to the announcement. The new lease comes as the college pursues a plan to restore full-tuition scholarships for all undergraduates.

"The significance of this agreement is ultimately about what it makes possible for generations of Cooper Union students," said Steven W. McLaughlin, president of The Cooper Union. "For more than a century, the Chrysler Building has helped sustain Peter Cooper's vision of opening access to education by removing financial barriers." McLaughlin added that the agreement is part of an integrated financial plan that provides a framework for pursuing the scholarship goal.

John Ruth, Cooper Union's vice president of finance and administration, said the college's leadership team and board of trustees, informed by expert advisors, conducted a deliberate and thorough process. "There was great interest in the property as evidenced by the competitive proposals we reviewed and considered," Ruth said. "Tishman Speyer emerged as the clear leader."

Tishman Speyer and PSP Investments Repositioning Plan

Tishman Speyer will undertake what it called an extensive building improvement and hospitality program. Planned work includes:

• Restoration of the building's façade and polishing and renewal of its crown.
• Modernization of the mechanical, elevator, electrical and air handling systems, and optimization of the cooling towers for energy efficiency.
• Reserving the 61st floor, known for its eagle gargoyles modeled after the hood ornament on the 1929 Plymouth, for an indoor-outdoor amenity program with an upscale lounge, outdoor access, food and beverage offerings and gathering space.
• A second amenity program with fitness, wellness and meeting spaces in the building's underground arcade.
• Prebuilding 75 percent of the building's current and upcoming vacancy with ready-to-occupy suites, an approach Tishman Speyer previously applied at its neighboring 6 Grand Central tower.

The prebuild strategy is designed to let tenants, particularly smaller users, move in quickly and see what working in the building will be like, the firm said.

Tishman Speyer CEO Rob Speyer said the firm is pursuing "an ambitious plan for the Chrysler Building at a historically strong moment for the Manhattan office market." Speyer pointed to the firm's work on The Spiral and its ongoing reinvention of Rockefeller Center as precedents, saying Tishman Speyer will "create an environment that will make our customers proud and excited to work here every day."

Simon Marc, senior vice president and global head of private equity and real estate investments at PSP Investments, said the transaction reflects the pension investor's strategy in prime office. "This transaction reflects our deliberate investment strategy in prime office: acquiring high-quality assets in the strongest locations and executing a clear business plan alongside a proven global partner," Marc said. He added that the Chrysler Building is directly connected to Grand Central and that PSP Investments is proud to be part of its transformation.

PSP Investments, one of Canada's largest pension investors, reported C$320.6 billion of net assets under management as of March 31, 2026. It manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal public service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force.

Grand Central Office Market Context

The announcement describes the Grand Central submarket as having one of the lowest office availability rates in Manhattan, with virtually no new office construction in the neighborhood for decades and premier towers at or near full occupancy. Market data for 2026 shows a more varied picture. Cresa's first-quarter 2026 Manhattan report lists 48.2 million square feet of Grand Central office inventory, a 13.9 percent availability rate, roughly 1.07 million square feet of quarterly leasing activity and average asking rent of $83.21 per square foot. Another compilation of 2026 data, drawing on Cushman & Wakefield and Colliers, puts Grand Central vacancy at 18.5 percent, against Manhattan-wide availability of 13.7 percent, with asking rents of $69.93 per square foot overall and $74.18 per square foot for Class A space.

The differing figures reflect variations in methodology, including availability versus vacancy and reporting periods. The Chrysler Building's own vacancy stood at approximately 14 percent at the start of 2026, according to CoStar data, though other coverage has cited higher figures.

Outlook

The deal pairs a landowner seeking a long-duration income stream with an operator planning a substantial capital program. Because the partners are funding the ground lease and redevelopment entirely with equity, they carry the lease-up and construction risk without debt leverage. Execution will involve renovating a landmarked 1930 tower, maintaining operations during construction and competing with renovated and newly developed Grand Central-area buildings that offer modern systems and premium amenities. The tower's direct Grand Central connection, limited new supply in the submarket and the planned ready-to-occupy suites are the main elements of the partners' leasing strategy.

Sources

• Tishman Speyer & The Cooper Union Finalize Ground Lease Agreement and Revitalization Plan for Chrysler Building (PR Newswire)
• Tishman Speyer & The Cooper Union Finalize Ground Lease Agreement and Revitalization Plan for Chrysler Building (PSP Investments)