The Chrysler Deal

In his round, paneled office atop the Manhattan headquarters of Webb & Knapp, Real Estate Tycoon William Zeckendorf has three telephones, a bronze Matisse nude, but no windows. The reason, says the room's designer, is that for a showman like Bill Zeckendorf "it would be ridiculous to create any environment for him other than one consisting exclusively of himself."

In this environment, Zeckendorf is rarely diverted from dreaming up big and complicated real-estate deals. Last week he invited reporters into his office to disclose his biggest deal yet. He had just bought control from the Chrysler family of the famed, spire-topped Chrysler Building, its annex, the Chrysler Building East, and the nearby Graybar Building/- owned by Eastern Offices, Inc. Price: $52 million. It was the biggest office-building transaction in modern real-estate history, approached only by the sale of the Empire State Building for $51.5 million in 1951.

In negotiating the labyrinthine stock transfer, more than 100 attorneys from a dozen leading Manhattan law firms worked over a ton of legal documents. In the deal, Webb & Knapp and Graysler Corp., owned by Lazard Freres, investment bankers (with a 25% interest in the transaction), got all the stock in the Chrysler Building and its annex plus the stock controlling the Graybar Building. The money came from $40 million worth of mortgage bonds taken by Equitable Life Assurance Society, $4,000,000 from J. P. Morgan & Co., $8,000,000 from Webb & Knapp.

For Webb & Knapp, the buildings, all fully rented, will bring in an estimated $2,000,000 a year before taxes. Moreover, says Zeckendorf, the skyscrapers will be more profitable under one control; costs can be cut, possibly by a private power and heating plant for all three, and tenants can shift around more easily in the different buildings, according to their needs. He also plans to improve the buildings, starting out by air-conditioning the Chrysler and Graybar.

The Chrysler deal was not the only big deal for Zeckendorf last week. He also paid about $7,000,000 for Manhattan's stodgy old (116 years) James McCreery department store, owned by Associated Dry Goods Corp., which controls the Lord & Taylor stores. He got the building, fixtures and equipment (but not the inventory), began looking around for "a real big operator" to lease it to. At week's end, he thought he had just the operator: Manhattan's Ohrbach's (TIME, Dec. 13, 1948), a fast-growing Union Square store that has been thinking of moving uptown. The deal, said he, was "very close."

/-The Chrysler Building, completed in 1929 for $16 million, is the worlds second highest (77 stories v. 102 in the Empire State Building). The 32-story Chrysler Building East, finished last year, cost $16 million. The 30-story Graybar Building was built in 1927 for $13.5 million.

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