NYC’s Roosevelt Hotel Owner Looking to Sell For Up to $1B, as City Vows to Move Migrants Out

By: Hellen Zaboulani

New York City has announced that it will move migrants out of the Roosevelt Hotel by June. As reported by the NY Post, this news has led the East Midtown property to immediately fetch interest from a wide range of developers. The owner, the Pakistan government’s Pakistan International Airlines (PIA), is hoping to sell the property, eyeing a price potentially near $1 billion, per sources.

The hotel, which sits on a prime 42,000 square foot full-block parcel, could be torn down, with a developer potentially building a skyscraper with up to 1.8 million square feet. Zoning in the East Midtown neighborhood has recently been changed, to allow for a much larger FAR (floor-to-area ratio), increased from 15 to 30. The new rezoning max size increase is only available to developers who will promise to, in turn, provided transit and public-space improvements and amenities, to be approved by the city and an MTA review.

Per the Post, PIA’s sale broker, JLL, hopes to issue a formal solicitation for sale of the property sometime in the spring. Still, market sources told Realty Check that already “informal conversations of interest” have taken place with some big-named developers including Tishman Speyer, Related Companies, SL Green and Vornado.

The Roosevelt site takes up the full block bounded by Madison and Vanderbilt avenues between East 45th and 46th streets. The 1000-room, 19-story hotel itself, opened in 1924, is already antiquated. It has not been at its prime for years, and after hosting migrants for so long, it is likely not in any condition to reopen as is. The hotel was shuttered in 2020, due to the COVID-19 pandemic. It reopened in 2023 only as a shelter for asylum seekers, and has been operating for the last two years under this government contract.

The city’s $220 million lease for the Roosevelt hotel will soon be terminating. The city has exercised an option to end the lease with four months’ notice, allowing the owner to now seek out a new buyer.

A new tower at the site would likely be mixed-use, combining offices with a hotel and some retail at the ground floors. The potential new site could tap into the direct access to Grand Central Terminal. Its illustrious skyscraper neighbors would include the soon-to-be-completed 60-story JP Morgan Chase headquarters at 270 Park Avenue, and SL Green’s 73-story One Vanderbilt, completed in 2020.

PIA is reportedly eager to cash out of the property, as the Pakistani government and airline have been strapped for cash. The Roosevelt’s lease termination posed “a major financial setback” for PIA. The Islamabad government is under stress to comply with the terms of a $7 billion International Monetary Fund bailout agreement.

Still, a sale would not be so easy as the buyer would need to pay a substantial termination fee to the Hotel Trades Council/Local 6 union even if the new project doesn’t include a hotel, due to the contract with Roosevelt’s owners, the Post reported. “Any development plan would have a lot of moving parts,” one investment-sale specialist noted “A buyer has to make a deal with the union. Their proposal has to go through ULURP.”