Developer Steve Witkoff is hitting the brakes on plans to convert the Park Lane Hotel into luxury condominiums.
Instead, the developer and his partners, including Harry Macklowe and Douglas Elliman Chairman Howard Lorber, are considering a renovation of the 46-story hotel at 36 Central Park South, according to Witkoff, who led the investor group that purchased the property from the estate of Leona Helmsley for $660 million in 2013.
“The fact of the matter is, the velocity is not what it was,” Witkoff said in an interview with Bloomberg News, referring to a slowdown in the ultra-luxury condo market. “Because we have a cash flow, we have the flexibility to wait.”
When the owners bought the hotel, located at the southern edge of Central Park, options included demolishing the building, converting it into condos and hotel rooms, or continuing to run the Park Lane as a hotel. Renderings released in May 2015 depicted a 1,210-foot tower with 88 units. The project, dubbed 1 Park Lane, was set to cost $1.7 billion with expected revenue of $2.3 billion, according to reports.
But an influx of luxury condos in recent years has shifted the supply-demand equation, creating a crowded market for high-end new developments. Manhattan’s median sale price was a record $1.15 million in the fourth quarter, driven by closings in the luxury market, according to real estate appraisal firm Miller Samuel.
The Park Lane Hotel is located two blocks north of 57th Street, which some say has grown crowded with ultra-luxury condo towers like Extell Development’s One57, where a penthouse sold for $100.5 million.
Nearby, Macklowe is also developing 432 Park Avenue, where the penthouse is reportedly in contract for $95 million. Other projects in the area include JDS Development Group and Property Markets Group’s forthcoming 111 West 57th Street and Zeckendorf Development’s 520 Park.
Witkoff said the developers have suspended fundraising efforts through the EB-5 program, which grants green cards to foreign investors who make a minimum investment of $500,000. He also said uncertainty in the Chinese market and questions about the future of EB-5 were both factors. [Bloomberg] – E.B. Solomont