No takers at Park Lane Hotel auction

Sellers of 47-story hotel expected to fetch $1B

TRD New York /
Nov.November 02, 2017 11:45 AM

From left: Jho Low, Steve Witkoff And The Park Lane Hotel (Credit: Getty Images)

Was it the price? The state of the market? The baggage?

Offers On The Park Lane Hotel were due last week, but no buyers showed up willing to pay the $1 billion the property was expected to fetch.

The 47-story hotel overlooking Central Park was put on the market last year under an agreement reached between developer Steve Witkoff and the U.S. government, which is investigating one of the hotel’s current owners, Malaysian businessman Jho Low.

In April, Witkoff tapped Eastdil Secured’s Roy March and Lawrence Wolfe to market the Park Lane.

The current lack of interest reflects the state of the market, in which foreign buyers are no longer snapping up trophy properties with gusto. And the high-end condo market — not to mention Billionaires’ Row — faces an uphill battle. “I think it’s the world’s greatest site for development,” Jeffrey Davis, JLL’s director of the hotels and hospitality group, told the New York Times. “The problem was timing.”

Low’s involvement also complicates matters.

Witkoff and Low paid $654 million for the hotel in 2013. Along with minority investors Harry Macklowe and Howard Lorber, they planned to turn the 605-key hotel at 36 Central Park South into a luxury condo designed by Herzog & de Meuron. Witkoff and his partners put up 15 percent with Low initially putting up 85 percent, including a $100 million deposit. Later, Low brought in Abu Dhabi’s Mubadala Investment Company, which took a 30 percent stake.

Last summer, the Justice Department sought to recover more than $1 billion in assets from Low, who allegedly stashed money stolen from a Malaysian development fund in art, jewelry and luxury real estate in New York and California.

His share of proceeds from the sale of the Park Lane would have been placed in escrow pending the outcome of the criminal investigation.

Experts told the Times that potential buyers were scared off by the government’s role, and by the changing market. “No one wants to be the last to buy a hotel in this cycle,” Chad Crandell of CHMWarnick said. [NYT]E.B. Solomont


Related Articles

arrow_forward_ios
(iStock)

Half empty or half full? Hotel occupancy rate nears 50%

Half empty or half full? Hotel occupancy rate nears 50%
28 Liberty Street (Wikipedia)

Manhattan’s office leasing sees busiest month since January

Manhattan’s office leasing sees busiest month since January
Maison Kayser (Photo via Tools of Men via Flickr)

Maison Kayser may bid New York adieu

Maison Kayser may bid New York adieu
Newmark’s Brian Waterman with 7 Hanover Square (Google Maps, Twitter)

Newmark nabs REBNY prize for deal with NYC Health + Hospitals

Newmark nabs REBNY prize for deal with NYC Health + Hospitals
The legislation from a City Council member introduced a bill to temporarily repeal the commercial rent tax for businesses during the Covid-19 state of emergency. (Getty, iStock)

Commercial rent tax cut introduced in City Council

Commercial rent tax cut introduced in City Council
Michael Rudder, James Nelson, 141 Wooster Street and 633 Third Avenue (Google Maps)

The Outlook: Industry experts break down Manhattan’s office condo market

The Outlook: Industry experts break down Manhattan’s office condo market
Peter Nicoletti and Colliers' David Amsterdam

Colliers taps JLL’s Peter Nicoletti to lead capital markets

Colliers taps JLL’s Peter Nicoletti to lead capital markets
City Council member Keith Powers (Getty)

Pol, biz groups: Suspend rent tax, extend outdoor dining

Pol, biz groups: Suspend rent tax, extend outdoor dining
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...