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Are apartments the answer for Vornado’s Hotel Pennsylvania?
Office conversion wouldn't be able to compete with Hudson Yards, World Trade Center: Roth
Vornado Realty Trust CEO Steven Roth has offered up yet another possibility for the future of Hotel Pennsylvania — apartments and retail.
Uncertainty has swirled around Vornado Realty Trust’s [TRDataCustom] plans for the building for years. It was originally slated to become 68-story office tower called 15 Penn Plaza, but that plan was jettisoned when Merrill Lynch decided not to lease space there. In 2013 Vornado announced a $300 million renovation, but in 2014 it said the proposal for 15 Penn Plaza could be back on.
On a conference call last week, Roth said an office building at the site simply isn’t a viable option with current market conditions.
“The problem is we cannot deliver the site economically in competition with what Hudson Yards is doing and the World Trade Center is doing. And we’re not off by a little, we’re off by a lot for lots of different reasons,” he said, according to Real Estate Weekly. “I can’t tell you how much we hate having to build a building where we have to get $150 rents or something like that,” he added.
He stopped short of making a definitive plans, however. “The options for Hotel Penn are, leave it where it is, knock it down,” he said, “If we knock it down, it’s going to be apartments and retail. If we leave it the way it is, it’s going to be a hotel.”
In March, The Real Deal looked at the whether Roth’s investments at Penn Plaza will pay off. [Real Estate Weekly] — Miriam Hall