The city’s announcement that it would move migrants out of the Roosevelt Hotel by June made the precious East Midtown site Topic No.1 among commercial developers.
The property’s owner, the Pakistan government’s Pakistan International Airlines (PIA), wants to sell it for what sources said could be $1 billion.
A developer could tear down the antiquated hotel to build a skyscraper of up to 1.8 million square feet on the roughly 42,000 square-foot parcel, sources said. A project so large would need to exploit recent area rezoning which raised maximum FAR (floor-to-area ratio) from 15 to 30, available only if a developer provided transit and public-space improvements and amenities subject to city and MTA review.
PIA’s sale agent, JLL, has yet to issue a formal solicitation, which will likely happen in the spring. However, market sources told Realty Check that “informal conversations of interest” have taken place with developers including Tishman Speyer, Related Companies, SL Green and Vornado.
The Roosevelt site takes up the full block bounded by Madison and Vanderbilt avenues between East 45th and East 46th streets. A new tower would enjoy direct access to Grand Central Terminal. Its skyscraper neighbors would include the nearly finished JP Morgan Chase headquarters and SL Green’s One Vanderbilt.
A new tower might combine offices, a hotel and retail. A buyer would need to pay a substantial termination fee to the Hotel Trades Council/Local 6 union even if the project didn’t include a hotel, as per its contract with Roosevelt’s owners.
JLL has represented PIA since early last year, but its role was limited as long as the city’s $220 million Roosevelt lease remained in effect. Now that the city has exercised an option to end the lease with four months’ notice, the hotel site has become the hottest potato in the Manhattan shoot-for-the-sky building scene.
PIA is eager to unload the site to help alleviate the airline’s and the government’s cash-crunch. The Jerusalem Post, which monitors Pakistani finances closely, last week called the lease termination “a major financial setback” for PIA. The Islamabad government is under pressure to meet terms of a $7 billion IMF bailout agreement.
“Any development plan would have a lot of moving parts,” one investment-sale specialist noted “A buyer has to make a deal with the union. Their proposal has to go through ULURP. They need to find an anchor tenant. You’re looking at a three-to-five-year process.”
Reopening the Roosevelt as a hotel short-term wasn’t likely, an industry source said – “It was not in great shape before the migrants came and God knows what it’s like now.” Tens of thousands of migrants, not all of them legal and some with criminal records, have lived there for nearly two years.
Reps for SL Green, Vornado, Tishman Speyer and Related either declined to comment or didn’t get back to us. Premier investment-sale wizard Darcy (“Skyscraper Queen”) Stacom, who just launched new capital markets advisory firm StacomSilverstein with Wendy Silverstein, declined to comment on the site’s potential value.
City Planning Commissioner Daniel Garodnick, who was instrumental in rezoning East Midtown to allow larger buildings, couldn’t immediately be reached.
JLL New York-area president Peter Riguardi wouldn’t comment except to say, “We are very impressed with the sophisticated developers showing interest.”
Two new leases have taken up 19,000 more square feet at 5 Penn Plaza. They follow 70,000 square feet of leases in January.
The nonprofit NY E-Health Collaborative, which works with the state Department of Health, took 15,000 square feet on the twelfth floor. Tech firm Dynatrace took 4,000 square feet on the 24th floor.
The 650,000 square foot building on Eighth Avenue between West 33rd and 34th streets, owned by investor Stephen Haymes, recently completed a major upgrading and is nearly 90% leased. JLL’s Mitch Konsker, leader of the landlord’s agency team, said, “5 Penn has been powerfully repositioned to meet modern-office demand.”
Since the sale of East Hampton’s historic Hedges Inn to the owners of the Colony Hotel in Palm Beach, South Fork-watchers have wondered y how Andrew and Sarah Wetenhall would brand the restaurant space previously leased to Zero Bond club king Scott Sartiano.
My colleague Jennifer Keil reported last month they plan an all-day restaurant that will “partner with local farmers and feature down-home events like bingo and trivia nights.”
We happened to dine at the Colony’s restaurant, Swifty’s, when we were in Palm Beach last week. Although it’s none of our business, it struck us that its seasonal, modern-American menu would be a logical fit for the indoor-outdoor Hedges setting. Well-heeled, well-behaved customers at Swifty’s (and at its former Lexington Avenue location) won’t likely create a noise problem like the alleged one that led to Sartiano’s ouster.
And “down-home events like bingo and trivia nights” are already in full swing at Swifty’s in Palm Beach.
There’s finally some good news at the Trump Organization’s beleaguered 40 Wall Street, where office tenants have dwindled and a 20,000 square-foot, former Duane Reade has yet to be replaced.
Nero Food Lab, an Italian restaurant and gourmet food shop and bakery, just opened on the ground floor, more than five years since the 17,000 square-foot venue was first announced in January of 2020.
The deal appeared dead when the pandemic struck. But the handsome eatery bowed for a “soft opening” two weeks ago and plans a full-scale launch soon. There’s also a smaller Nero at Trump Tower.
This story originally appeared on NYPost
