I must’ve had a hundred calls,” says Dolly Lenz. The kingpin Douglas Elliman broker is talking about the rumor that crept through the luxury-real-estate world in recent weeks: that two of New York’s great old hotels were going condo. And it is indeed so: The Plaza and the St. Regis (pictured) are, for the first time, offering rooms for sale rather than for hire. A purchase will confer full hotel treatment—nightly turndowns, room service, supreme levels of staff attention.
Though hotel living is nothing new—the Pierre and the Carlyle, for example, have sold residential units for decades—most such arrangements are co-ops. In the case of the Plaza, the Israeli developer El-Ad Properties, which recently bought the hotel for $675 million, is looking to convert the top few floors into condos, which are particularly appealing to overseas buyers already drawn to hotel living. “One guy wants to buy a dozen for his family. It’s insane,” says Lenz. She guesses they’ll sell at about $3,000 per square foot, starting next year. (That computes to a staggering $3 million for a one-bedroom.) Likewise the St. Regis, where floors eight through ten are going condo, confirms marketer Louise Sunshine, adding that butler service is among the perks. “And if you are not using it,” she says, “you can give it to the management to lease for you.”
Why there, why now? A shortage of prime building sites is the big reason. (Several other midtown hotels, including the Mayflower, the Windsor, and the Inter-Continental on Central Park South, are all becoming apartment buildings. The Gramercy Park Hotel will also start selling condos early next year.) The economic calculations heavily favor conversion, explains developer Louis Dubin of the Athena Group. “For a 1,000-square-foot hotel suite, you could get $2 million. At a top hotel with services and a great location, let’s take those two rooms—they have to throw off $400 to $500 a night, and they have maybe 70 percent occupancy,” he says. “In the best of cases, they could net $200,000 [per year]. Property taxes take 35 percent, maybe 40 percent for operations—that’s only a 5 to 6 percent return.” (In other words, the building’s like a Porsche: worth more sold off for parts than as a whole.)
Besides, adds Dubin, “there’s a shift in lifestyle. We want to walk in and go, now more than ever—we want to call downstairs for a meal.” And then there’s the swank factor. “They are New York institutions,” says Michele Kleier of Gumley Haft Kleier. “If you are a foreigner and you want someone to relate to what you are doing in the city, if you say you’re living at 610 Park Avenue, they’ll say, Where? If you say the Plaza or the St. Regis, there’s a mystique. They have all been immortalized.”
Movers
Brokers on Duty for Rudy and Judi
Rudy and Judith Giuliani still haven’t found a Hamptons house, but not for lack of trying. Sources say they spent a recent weekend touring houses in the $3 million range, mostly north of the highway in Water Mill. They were also spotted viewing a $3.3 million house on Pond Lane in Southampton, which is closer to the beach. “East Hampton is too far for them,” says an insider, adding that they stopped for lunch at Bridgehampton’s Candy Kitchen. Until they move into a new nest, they’re still staying in Judith’s relatively humble Noyack condo, where the former mayor cooled his heels the summer after his public split with Donna Hanover. Over the past two years, the couple has toured about 60 East End houses, including a $1.5 million–plus estate in Sag Harbor last summer. East End spies report that the couple house-hunts in a relatively conspicuous arrangement: Judi often rides with the broker in one car, while Rudy follows in a sedan with two armed guards. Settling down in Manhattan was significantly more simple: Two years ago, they bought a nine-room $5.25 million prewar co-op on the Upper East Side.
Triple Assessment
450 East 52nd Street
Three-bedroom, 3.5-bathroom, 4,700-square-foot co-op.
Asking price: $5.9 million.
Monthly maintenance: $6,182.88.
Broker: Barbara Fox, Fox Residential Group.
Since this apartment went on the market, it’s garnered interest—but no offers—on a price that our panel says is at least a million bucks too high. Why? A peculiar layout, hard-to-find entrance, and singular bathroom décor make this a complex apartment—and a complex sale.
Donna Olshan, Olshan Realty: “It reminds me of an urban version of Philip Johnson’s Glass House,” Olshan says, referring to the light diffusing through the garden windows. She sees drawbacks—the noisy FDR nearby and the toilet built into a wooden slab (“like an outhouse!”). The buyer will “put a lot of money into it—you’ve got to factor that in.”
Her assessment: $4.995 million.
Jane E. Goldberg, Century 21/William B. May: The entrance, odd layout, and the snug upper level won’t draw socialite party-throwers, Goldberg says. “This space is for someone reclusive,” she suggests. “A single guy.” She’s also heard that it’s not an easy board.
Her assessment: $4.75 million.
Norma Hirsh, Douglas Elliman: All the angles make it “hard to absorb,” says Hirsh, but she’s less concerned about the FDR noise (“They’ll get used to it”) than about the dark dining area and the almost subterranean garden. Hirsh’s ideal buyer? A reclusive writer.
Her assessment: $4.5 million.
—Will Doig