Friday, March 10, 2006


The conversion of hotels to condos has been all the rage, in Manhattan, lately. Harry Macklowe is now ready to convert some tired properties to a hotel/condo mix.

HARRY Macklowe is readying a major new hotel/condo development at one of Midtown's most valuable locations, just as central Manhattan has grown increasingly starved for first-class hotel rooms and while the market for mixed hotel/apartment projects remains strong.

Sources said five old brick structures at the southwest corner of Madison Avenue and 53rd Street will soon be razed for a tower of several hundred thousand square feet, with a hotel to occupy roughly the lower third and the luxury apartments the upper floors - a formula similar to that at a planned new project on the site of the Mark Hotel.

Steve Cuozzo writes that Maclowe is keeping his plans for the Midtown properties close to the vest...

In fact, Macklowe has kept his plans under tight wraps, and word of the demolition plans had the real estate and hotel worlds buzzing yesterday. Cushman & Wakefield investment-sale specialist Ron Cohen said Macklowe "has thought about it for a long time" and at one point even considered selling the assemblage.

CB Richard Ellis investment-sale specialist William Shanahan, who's not involved with the property today but who brokered the sale of 16-20 E. 53rd to Macklowe some years ago, called the site in the heart of Midtown's retail, office and museum district "perfect, ideal" for a hotel/condo combination.

Sean Hennessey, a Lodging Investment Advisers hotel analyst, said Macklowe's plans are similar to other developers. "The rebound in the hotel industry has led developers to focus on exploiting unmet need," he said. "And hotels serve the purpose of sitting at a project's lower levels, thus pushing the apartments up higher where they command better prices."

Although the wider condo market shows signs of softening, it doesn't yet apply to prime locations where residents can avail themselves of first-class hotel services.

Meanwhile, Midtown and the Upper East Side have lost thousands of hotel rooms in the past few years to residential conversion at the Plaza, St. Regis, Intercontinental and Stanhope, among others - a decline only partly offset by the growth of "boutique" properties in remote neighborhoods.

Cushman's Tom McConnell said, "Macklowe works in mysterious ways."

New York Post: Macklowe's March by Steve Cuozzo


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