Allan Fried’s GHC Development is planning to convert the former American Stock Exchange building in the Financial District into a hotel with a large retail component at a time when both property types are facing headwinds.
GHC and its partner, Clarion Partners, plan to pump $65 million into upgrading the retail space, which recently hosted a two-month-long exhibition on the history of fashion house Louis Vuitton. The four lower levels of the 14-story building could offer as much as 100,000 square feet of retail space.
The success of that exhibit, along with Lower Manhattan’s transformation into a live-work-play neighborhood, convinced Fried that now is the time to move forward with his project, the developer told the Wall Street Journal.
“It’s now a desired location,” he said. “There are people who work in graphic arts, media, fashion. Before, it was strictly finance, real estate and law [workers], who went home at five o’clock.”
Fried bought the property at 86 Trinity Place and an adjacent building for $65 million in 2011, two years after the American Stock Exchange left after merging with the New York Stock Exchange.
Fried rezoned the adjacent building at 22 Thames Street for residential, and in 2012 sold it for $87.5 million to Fisher Brothers, which sold the property two years later for just shy of $184 million to for Michael Shvo, who rebranded the property as 125 Greenwich Street.
GHC sold a 70 percent stake in the property it held onto, which it is calling 123 Greenwich Street, to Clarion Partners in 2015. The deal valued the property at $150 million, Fried said.
The redevelopment is not without its challenges, though. Lower Manhattan’s vacancy rate in the fourth quarter jumped 6.2 percent year-over-year to 15.3 percent, according to Cushman & Wakefield. And the supply of hotel rooms in the Financial District grew 10.7 percent last year, with another 1,917 rooms in the pipeline, according to hotel data firm STR. [WSJ] – Rich Bockmann