- Burkhan World Investments and partners have submitted a proposal to redevelop the Roosevelt Hotel into a 1.3M SF tower through a 99-year ground lease deal with current owner PIA Holding Co.
- The deal would allow Pakistan’s government to retain a 50% stake in the property, which has been closed since the pandemic and repurposed as a migrant intake center.
- Redevelopment prospects are bolstered by the hotel’s prime location and favorable zoning but face financing and timeline challenges amid NYC’s slow office market recovery.
A Historic NYC Hotel Faces a New Future
According to Bloomberg, The Roosevelt Hotel in Midtown Manhattan may be headed for redevelopment. A group led by Burkhan World Investments has submitted a proposal to transform the property into a new tower.
The deal would be a joint venture with the building’s current owner, PIA Holding Co., a Pakistani state-run company. Under the plan, the group would lease the land for 99 years, with the option to extend another 99 years. PIA would keep 50% ownership. The redevelopment would include roughly 1.3M SF of space, partly by buying additional air rights.
Ties to Migration and Pakistan
The hotel has been closed since 2020. During the pandemic, it was converted into a migrant intake center under a deal with New York City, earning it the nickname “the new Ellis Island.” That arrangement cost the city about $75M a year.
PIA has owned the property since the late 1970s. The site, located across from Grand Central Terminal, sits in a zoning district designed to promote taller buildings. This makes it a prime location for redevelopment, similar to JPMorgan Chase’s new headquarters nearby.
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Financial Potential and Challenges
A Burkhan representative called the deal the “best option” for Pakistan’s government. It allows the country to hold on to the property while unlocking its value. The proposal is still under review. Pakistan’s Cabinet Committee on Privatisation is expected to discuss it soon.
While interest in new office towers is growing, financing remains a challenge. Developers often need tenants lined up before securing loans.Past projects in Midtown show the risk. Vornado Realty Trust demolished the Hotel Pennsylvania but has yet to start a new tower. RXR’s proposed tower near Grand Central is also delayed.
High Cost to Reuse
Hotels like the Roosevelt that housed migrants during the pandemic face high renovation costs. Bringing rooms back to hotel use may cost between $30,000 to $40,000 per room, according to industry experts. That adds pressure for owners to consider full redevelopment rather than reopening in their previous form.
