Tishman Speyer Takes 150-Year Ground Lease on Chrysler Building With $235M Restoration Plan

• Tishman Speyer secured a 150-year ground lease for the 1.3 million-square-foot Chrysler Building and will invest $235 million in its restoration and modernization.
• PSP Investments is the lead institutional investor, with the partnership using 100% equity to fund the ground lease and redevelopment.
• The plan includes 75% prebuilt office space, a new 61st-floor indoor-outdoor amenity center and major infrastructure upgrades.

What Tishman Speyer Is Taking On

Tishman Speyer is returning to one of Manhattan’s most recognizable office towers with a long-term bet on 405 Lexington Avenue, directly connected to Grand Central Terminal.

The 77-story, 1.3 million-square-foot Chrysler Building has struggled with vacancies, aging infrastructure and financial problems under its previous ownership. Tishman Speyer now plans to reposition the landmark as a modern boutique office property.

What The $235 Million Will Fund

The investment goes well beyond cosmetic improvements.

Tishman Speyer plans to restore the facade and iconic Art Deco crown while modernizing mechanical, elevator, electrical and air-handling systems. Cooling infrastructure will also be upgraded for greater energy efficiency.

The 61st floor will become a major amenity destination with an indoor-outdoor lounge, food and beverage offerings and gathering space. Additional fitness, wellness and meeting facilities are planned for the underground arcade.

What The Office Strategy Looks Like

The biggest leasing strategy may be the decision to prebuild 75% of current and upcoming vacant space.

Instead of waiting for tenants to commit before completing improvements, Tishman Speyer plans to deliver ready-to-occupy suites designed to attract companies that want speed and flexibility.

That strategy has already been used at nearby 6 Grand Central, giving the landlord a playbook for competing in Manhattan’s increasingly landlord-friendly office market.

What The Grand Central Location Means

The Chrysler Building enters the market as the Grand Central office submarket remains one of Manhattan’s tightest. Limited new office construction and strong demand for high-quality space give renovated buildings near the terminal a significant advantage.

That backdrop is important for investors. Manhattan office leasing reached 10.06 million square feet in Q3 2026, while availability fell to its lowest level since 2020 and asking rents reached their highest level since July 2020.

What The Deal Means For Owners

The Chrysler Building is a major example of the current opportunity in value-add Manhattan office.

The asset has the location, scale and architectural identity that tenants cannot easily replicate. The challenge is converting those advantages into a modern workplace that can compete with newer Class A buildings.

Tishman Speyer and PSP are betting that capital investment, prebuilt suites and high-end amenities can turn an underperforming landmark into a premium office destination.

For landlords, the message is straightforward: Manhattan’s improving fundamentals are creating room for well-capitalized owners to reposition older assets and capture stronger rents.