Continuing the discussion from NEW YORK | 57th Street Corridor “Billionaires Row” NEW:
The property was bought by Developer Steven Witkoff and a Malaysian equity partner, Jynwel Capital, who plan to operate it as a hotel as they mull options such as a residential conversion or tearing it down and building anew.
By Daniel Geiger
November 26, 2013
Developer Steven Witkoff has teamed up with a Malaysian equity partner, Jynwel Capital, to buy the Park Lane Hotel on Central Park South for $660 million. The transaction, which was financed by Wells Fargo and Criterion Real Estate Capital, closed on Monday, the partnership between Mr. Witkoff and Jynwel announced.
The deal is the latest of several high profile real estate transactions completed with an investor from the Far East. In late October, the Kwee family from Singapore invested $300 million into a planned mixed use tower at 53 W. 53rd St., which has been popularly known as the MoMA Tower because it will provide expansion space in its base for the MoMA, which is next door. Asian financiers also bankrolled that project’s $860 million construction loan, according to a report in The Wall Street Journal.
Mr. Witkoff, one of the city’s most prolific developers of residential space, said that Jynwel shared his vision of continuing to operate the property as a hotel, while contemplating future plans for the site.
“This was a unique deal because we’re keeping the hotel operations,” Mr. Witkoff said. “It’s a cash flow deal, the hotel earns about $20 to $25 million annually, which is enough to service this debt while we consider longer term plans.”
Mr. Witkoff said that the building could eventually be renovated, either fully or partially converted over to residential use, or demolished and redeveloped from the ground up as either residential, hotel or a mixture of both.
“What we like is that there are a lot of options here and we’re still contemplating them,” Mr. Witkoff said.
Several minority partners have also invested in the deal. They include New Valley, Highgate Holdings, and Macklowe Properties. Mr. Witkoff said Highgate, an operator of hotels, would help run the Park Lane Hotel. Macklowe Properties would appear to bring additional development experience. That company, chaired by Harry Macklowe, is in the process of co-developing a project in that neighborhood, the nearby residential spire 432 Park Ave.
The Park Lane Hotel, which was built by Harry and Leona Helmsley, and sold by the late Mrs. Helmsley’s trust, sits along Central Park South between Fifth and Sixth Avenues, a stretch that is considered one of the city’s most valuable locations. The area has seen several plans take shape in recent months for a new generation of super-tall ultra-luxury towers that offer sweeping view of Central Park and are asking for record prices.
In addition to Jynwel and the Kwee family, several other Asian investors have made bold entries into New York City real estate in recent months. Greenland Holdings Group, a real estate development and investment company owned by the Chinese government, has entered into a contract to acquire a majority stake in the Atlantic Yards development project in Brooklyn. Fosun International, another group from China, entered into a deal to acquire the office property 1 Chase Manhattan Plaza in lower Manhattan for $725 million in October.