Landmark Fifth Avenue Hotel Selling Stake to Complete $360M Redo

The owner of the Fifth Avenue Hotel, a new 153-room luxury hotel that has emerged from the $360M renovation of the landmark Second National Bank Building, wants to sell a stake of hotel to complete the project and pay down debt.

In a 13-year project, a trophy-caliber hotel was created in the bank building, a 1907-vintage renaissance-style structure also known as the Mansion. Developer Flaneur Hospitality gutted and redesigned the interior of the Mansion and added a 23-story building to the landmark at 250 Fifth Avenue, according to a Green Street alert.

The Fifth Avenue Hotel had a partial opening last fall, but only half of the rooms were ready. Flaneur extended a maturing $161M construction loan after an unsuccessful bid to refinance as lenders retreated from the market.

Flaneur would prefer to sell a stake in the hotel, which has an overall value above its current loan, with pricing determined by the structure of the deal. The developer is willing to negotiate the stake’s size, which can be structured as an equity or preferred-equity interest, Green Street’s report said.

Newmark has been tapped to market the property.

The Fifth Avenue Hotel was on the Forbes and Travel + Liesure “most anticipated openings” list last year. Located at the corner of West 28th Street, two blocks north of Madison Square Park, the hotel operates as an independent luxury property managed by Flaneur.

About a third of the rooms at the Fifth Avenue Hotel are suites, with high-end finishes. James Beard Award-winning chef Andrew Carmellini runs the hotel’s restaurant. There’s also a bar and 7,200 SF of event and meeting space.

Demand at NYC hotels rebounded in 2023 as tourism surged and the city cracked down on Airbnb rentals.

Room rates and revenue have risen above pre-pandemic levels as occupancy recovers in high-end hotels. Through November, luxury hotels in Midtown averaged revenue of $375 per room, exceeding the $327 per room average during the same period in 2019, according to CoStar data.

The revenue increase was driven by room rates, which rose to an average of $511 at the end of November. Occupancy during that period climbed to 73.4%, which is still lower than the average of nearly 80% in 2019.

As the overall hotel market registered a decline in sales last year, New York hotels mounted a rebound, with activity surpassing the 2022 total of $1.6B for deals valued at $5 million and up, according to Green Street’s Sales Comps Database.