New York
NYC foreign investment hits highest level in four years
JLL to head Roosevelt Hotel’s marketing for redevelopment
Pakistan previously leased dated property at 45 E. 45th to NYC for migrant shelter
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Dec 21, 2023, 9:00 AM
A 100-year-old property is poised for transformation from an antiquated and dowdy Midtown flop house to a Class A commodity. But first it needs a buyer, and a brokerage to find one.
The Pakistani government is nearing an agreement with JLL to bring its Roosevelt Hotel to market in the first step towards a redevelopment, The Real Deal has learned. The country owns the hotel on the 43,000-square-foot site by Grand Central Terminal through the state-run Pakistan International Airlines Corporation.
The commercial brokerage floated one of four proposals to a Pakistani commission, which invited technical and financial pitches for the hotel in September. The JLL consortium won out over Savills, a Citi-led consortium and an unidentified fourth entrant.
JLL is now finalizing its agreement with the board, people familiar with the matter told TRD. Once formally hired, the team will seek proposals from a developer that would likely involve tearing down hotel by and rebuilding the site with a trophy offering.
The site can be built as-of-right to 800,000 square feet. But the Grand Central District and East Midtown zoning overlays can bulk it up to a supertall, well over 1.5 million square feet with underground connections to underground transit.
The structure of the agreement, whether an outright sale or long-term ground lease, will be subject to negotiation.
After the pandemic, the city’s powerful hotel union settled its disputes with the property, paving the way for it to reopen as a migrant shelter and likely setting up parameters for any new project’s interaction with the industry group.
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The Roosevelt Hotel occupies a full-block site bound by East 45th and 46th streets and Madison and Vanderbilt avenues. The current 19-story building was named for President Theodore Roosevelt, who passed away before it was opened in 1924.
It now has just over 1,000 rooms, along with public ballrooms, meeting spaces, a rooftop bar and street-level retail.
After a series of railroad and hotel operator owners, Paul Milstein bought the hotel in 1978 and leased to Pakistan International Airlines. The state-owned firm acquired it outright in 2000, along with the Saudi Prince Faisal bin Khalid Al Saud.
The Pakastanis have previously considered selling the Roosevelt Hotel, but several attempts were unsuccessful because of politics or regime changes.
The hotel underwent a $65 million renovation in the 1990s, but the 9/11 terrorist attacks affected the city’s tourism and the hotel’s occupancy. A 2003 sale that would have brought in $225 million for the cash-strapped airline was scrapped.
A 2017 sale of the Roosevelt to reduce the airline’s $5.3 billion in debts never materialized after then Prime Minister Shahid Khaqan Abbasi rejected it, saying, “Apart from being a valuable property, the hotel also carries cultural significance for Pakistan.”
The hotel was instead refinanced in early 2018 for $105 million and by May, the prime minister was replaced.
Pakistan’s turbulent political climate will need to maintain a steady course for any transaction to occur: Current Prime Minister Anwaar-ul-Haq Kakar took office in August and new elections are scheduled for February.