Interesting News On Starwood Capital’s W. 57th Street Property

Andrew Calvo | September 3, 2008 | 0 Comments

A little over a year ago, I had written a post about Starwood Capital’s speculated purchase of the Steinway Building located on W 57th Street in New York City. The Steinway Building is located right next to the Ritz Cleaners site, which Starwood had purchased previously, at the time it was assumed that Starwood would combine the two properties and build a hotel there, most likely a Crillon due to it’s high-end location.

Click here to view Starwood Capital’s Site on W 57th Street

A New York Post articlefrom last week does a quick write up of four hotel sites in New York City which have not seen any action in quite a while. Starwood’s 57th Street property makes the list.

The article makes it clear that the Steinway purchase did not go through – and Starwood at this point only owns the Ritz Cleaners site, which has since been torn down and has a temporary plywood wall up preventing anyone from looking into or getting into the site. The article also mentions how Starwood might possibly sell the property.

That would be a turn of events since this site was highly expected to be the site of America’s first Crillon branded hotel (a 6-Star hotel, based on the Crillon in Paris). Since the credit crunch started in late 2007, Starwood has drastically reduced it’s hotel plans. Instead of doing a full scale simultaneous launch of 1 Hotel, Crillon and Baccarat Hotels, it now looks as though Starwood is only going through with the launch of the Baccarat Brand (locations in Wailea, Hawaii, Dubai UAE, and Anguillia seem to be going full speed ahead), with the 1 Hotel brand being significantly scaled back for the time being.

Although I cannot verify the accuracy of the following: 1 Hotel’s only active project seems to be the 1 Hotel & Residences in Vancouver, all others seem to have been put on the back burner for the time being.

If Starwood would sell the W 57th Street property in NYC, it only means one thing – they cannot and do not see the ability to purchase the adjoining parcels coming to fruition anytime soon, as just building from the Ritz site they currently own is just not conducive to a viable operation.

While the credit markets seem to have put dampers on a lot of their other projects – I don’t think the markets are entirely to blame for this property. Starwood has a reputation and history of holding onto a property for years before they finally break ground or make some major changes. Additionally, I don’t see Starwood letting go of a great location in a high-end location of New York City unless they really cannot build a project that would make financial sense – even if it’s in the long term.

[email protected]