A Gilded Age hotel once owned by William Randolph Hearst may get a fresh look in the new Roaring ’20s, now that the slumping hotel market has investors thinking about selling.
Shareholders in the Lombardy hotel co-op at 111 East 56th Street are looking to sell the property for north of $150 million, sources told The Real Deal.
The co-op shares are held by investors who sought to capitalize on the city’s booming tourism industry pre-Covid. But with the hospitality business still struggling to recover, owners are growing weary of covering the carrying costs of empty rooms and have banded together to sell all their shares, according to a person familiar with the listing.
A representative for the co-op shareholders could not be immediately reached for comment. The 192-unit property in the Plaza District is being marketed by Eastdil Secured, which declined to comment.
Marketing materials for the 22-story building just off of Park Avenue pitch it as a potential rental-to-for-sale conversion, a market that’s been constrained by the state’s 2019 rent laws limiting owners’ ability to convert rent-stabilized apartments.
“A lesson from the last cycle was that the first buildings to hit the market outperformed, as their only competition was stale inventory,” reads a teaser for the offering. Other potential uses include keeping the property as a hotel, running it as an extended-stay hotel or converting to a senior living facility.
The hotel was built in 1927 and purchased two years later for $4 million by Hearst, who was one of the largest property owners in the area. The building was converted into a co-op in 1957.