It was built in the last quarter of the 19th century as palace of José Manuel de Cerragería y Gallo de Alcántara, count of Cerragería. However, the building is best known as being the residence, from 1902, of Isabella of Asturias, daughter of Queen Isabella II, popularly known as “Chata” (a term of endearment that literally translates as “pug-nose”).
Located in Moncloa, this rectangular palace, organised around a central courtyard, was among the buildings constructed with the finest materials and greatest care in the city. After Princess Isabella took up residence, it was reformed and decorated by several of the most important artists of the time. Worthy of special mention are a mural in the guest lounge by José Gamelo, which represents the proclamation of the Catholic Monarchs in Segovia, and best of all, the magnificent palace staircase, by Mariano Benlliure.
Following proclamation of the Republic on 14 April 1931, the palace was closed and abandoned, which led to symptoms of deterioration, which became notably worse during the Spanish Civil War, since its proximity to the front-line meant it underwent significant damage and destruction.
In 1941, following the death of Alfonso XIII, the royal family sold the palace to the Spanish Air Force, which restored it and installed the offices of the General Headquarters of Central Air Command and of the Headquarters of the First Air Region of the Air Force, a role that it continues to play.