The Gulaylar Group plans to convert the office component of General Growth Properties and Thor Equities’ 685 Fifth Avenue into a luxury hotel, sources told The Real Deal. International hospitality chains LVMH’s Cheval Blanc, AccorHotels and the Oetker Collection are among five hotel operators currently vying to lend their brand to the property’s upper floors, sources said.
The U.S. real estate development arm of Turkish jewelry company entered contract in March to acquire the 90,000-square-foot office portion of the 20-story, 115,000-square-foot building for $160 million, after developer Michael Shvo backed out, as TRD reported last month. Plans call for an extra five floors for the hotel, bringing the building’s total height to 292 feet.
Details of the hotel’s layout vary based on which operator strikes a deal, but sources said it will hold as many as 90 rooms. Renovations would involve the addition of terraces and larger windows. Some of the hotel operators are also negotiating for an ownership stake, sources said.
Gucci, the last remaining office tenant, is leaving in August for its new digs at 195 Broadway in the Financial District. The luxury brand sold the building to GGP and Joseph Sitt’s Thor for $460 million in 2014, property records show.
Conceptual rendering of a hotel room at 685 Fifth Avenue (credit: Gulaylar Group)
GGP and Thor will continue to own the three-floor retail space at the base – soon to be home to Coach’s new 23,400-square-foot global flagship store known as the “Coach House.”
Mehmet Gulay, president of Gulaylar affiliate City’s Property Development New York, said he wants to bring a “European elegance” to the Fifth Avenue hotel circuit. Elsewhere on Fifth Avenue, an Aman hotel is slated to open at the Crown Building.
Gulay declined to comment on negotiations with a prospective operator.
Since breaking into the New York City real estate game in 2013, Istanbul-based Gulaylar has sought to deploy about $1 billion for real estate. The company’s first purchase there was the three-floor, 12,000-square-foot retail condominium unit at Extell Development’s International Gem Tower at 50 West 47th Street. Gulaylar developed the condo into the IGT Jewelry Mall, which opened the following year.
The deal would offer the international hotel chains the opportunity to expand their footprint in New York City. German-based hotel operator Oetker’s plans to run the 170-key New York Masterpiece hotel at the Sony Building recently fell through after the Chetrit Group and Clipper Equity opted to sell the office tower instead of convert it. The hotel would have marked Oetker’s New York City debut.
Other front-runners AccorHotels and LVMH Moet Hennessy Louis Vuitton hail from Paris. AccorHotels, which operates the Sofitel New York and Novotel New York Times Square in Midtown, bought short-term vacation rental provider onefinestay in April for $169 million. Meanwhile, LVMH, the largest luxury goods company in the world, has yet to bring its Cheval Blanc hotel brand to New York.