The developers of 701 Seventh Ave. in Manhattan’s Times Square expect to have an agreement with a hotel company in the next 45 days that may pave the way for a new tower, one of the site’s owners said.
The owners want a “W-type” name for the site, said Steven Witkoff, referring to Starwood Hotels & Resorts Worldwide Inc. (HOT:US)’s boutique brand. He spoke today at a midtown Manhattan conference sponsored by the law firm Schulte Roth & Zabel LLP.
Witkoff and partners Vector Group Ltd. (VGR:US) and Winthrop Realty Trust (FUR:US) announced last week they had bought the property, located on the northeast corner of Seventh Avenue and West 47th Street in one of New York’s most popular tourist areas. They intend to build a 475-room, 220,000-square-foot (20,400-square-meter) hotel on the site, above an 8-story, 82,000-square-foot retail base, Witkoff said.
“If we produce a hotel brand on top and get anywhere close to the leasing on this down below, the deal’s a screamer,” Witkoff said. “We’ll look a lot smarter than we probably are.”
Times Square hotels have averaged 86.4 percent occupancy this year through September, according to data from Smith Travel Research Inc. in Hendersonville, Tennessee. That’s up from 83.1 percent a year earlier.
Witkoff didn’t identify the name of the hotel operator the group is in negotiations with. The investor group paid $375 million for 701 Seventh Ave., plus closing costs and other expenses that brought the total to about $430 million, he said. Barry Sternlicht’s Starwood Property Trust Inc. (STWD:US) and Starwood Capital Group LLC provided $475 million of debt to the partners.
The site also has rights to a 22,000-square-foot light- emitting diode sign that would be among the biggest in Times Square, Witkoff said.
The property currently houses two office buildings, one of which was built in 1909. The larger building is covered almost entirely in advertising signs, mostly promoting Broadway shows.
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