The beginning gun has sounded for Kensico Properties’ sluggish march to a luxurious resort in Midtown Manhattan.
The Division of Metropolis Planning licensed the developer’s utility to rework 509 Madison Avenue from a 21-story workplace constructing to a 30-story resort, Crain’s reported. That formally launches the applying into the seven-month Uniform Land Use Evaluate Process, which would require approvals from quite a few stakeholders earlier than Kensico can go ahead.
Hoteliers Nabil and Fouad Chartouni are planning the Lowell Trendy, a companion to the posh Lowell Lodge within the Higher East Aspect. Their proposal requires 96 rooms, facilities and a foyer throughout 139,000 sq. toes, fronted on East 53rd Road. There would even be 3,300 sq. toes of retail area on the bottom ground fronting Madison Avenue.
Inside demolition of the workplace constructing is already underway and the ultimate tenants are anticipated to depart after Christmas, in response to an adviser to Kensico. Tenants on the constructing on the time the application was filed in August embody funding agency Banyan Tree Capital Administration, non-public fairness agency Yellowstone Capital Companions and Kensico itself.
Full demolition and building is predicted to begin in the beginning of the brand new yr, focusing on an early 2028 completion.
In 2017, Kensico put its leasehold of the office property on the market, although it boasted excessive occupancy charges that remained robust. The leasehold by no means bought, forcing the pivot.
Kensico has developed and invested greater than $2 billion in actual property throughout the globe, spanning workplace, retail and hospitality properties. The Lowell Lodge, which it acquired within the Eighties, is taken into account one of many extra luxurious hospitality properties in all of New York Metropolis.
However resort growth has grow to be more and more exhausting to return by within the Large Apple, and never simply due to how the pandemic quickly disrupted tourism. A 2021 Metropolis Council invoice mandated a particular allow for brand new resort developments, basically freezing the sector’s construction pipeline; not a single allow was authorised within the first yr of the laws.
The daunting prospect of creating a resort at the moment may include an enormous reward on the opposite finish. The dearth of incoming provide — plus a crackdown on the short-term rental business — helps to spice up the occupancy and room charges of properties that hung tight by the lean years.
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