He named it the Phoenix Greeley Square.
The iconic, but empty and discolored Martinique Hotel will soon rise from the rubble, thanks to a just-closed, hard-earned rental purchase of the long-troubled property in Greeley Square.
The previously bankrupt hotel will reopen in stages starting in December, although there is 12 to 18 months of mostly outside work. It will be labeled again as Curio Collection by Hilton, the flag it last carried before the pandemic brought it to a halt.
The renaissance reflects the rising fortunes of the Nomad Broadway corridor south of 34th Street, where new Ritz-Carlton and Virgin hotels and trendy restaurants like The Smith have replaced wholesalers and ugly sidewalk bazaar.
“Returning the lights in Martinique would be a booster shot for Greeley Square and Herald Square,” said the Midtown South Observer.
Martinique’s rescue did not come easily. Surprisingly, the buyer is not an outside investor, but a little-known company in the Midwest – the developer of Burnett Equity, based in Oklahoma City. Sources revealed that Burnett closed a $55 million lease purchase deal last week. Burnett is mostly active in Oklahoma with commercial and residential projects. It is expected to inject up to another $60 million into the stalled Martinique restoration project.
Dating back to 1897, the Martinique Hotel, at 1260 Broadway at West 32nd Street, was thought to be the city’s tallest continuously operating hotel until it was closed due to the pandemic. At various periods in its history it has been a luxury hotel, sro and, more recently, a sound destination for mid-market travelers.
We first reported the rental offer in March. Brokers Marcus and Millishap Eric Anton and Nelson Lee were hired by the landlord, a private investor from Florida, in December 2020 to market the bankrupt lease, which has 68 years left.
The mortgage fell into foreclosure following the death of a tenant in late 2020. Adding to the challenge, the 530-room property also had 34,000 square feet of retail space that was vacant except for a small Chase Bank branch. The property’s historical situation meant that renovation work had to be done with children’s gloves and that construction was years behind schedule.
But the hardest hurdle facing the new owner was that the land lease was on “extremely onerous terms,” one source told us.
We were told, “The appraisers told the brokers not to waste their time – the whole idea of wax is worthless.”
But Anton and Lee pressed to find a buyer. They expected to receive offers from foreign investors who considered New York cheap. They did, but they were also surprised to hear news from Oklahoma City,” said an insider.
Analysts last winter speculated that the rent could reach $70 million to $75 million. But two cases led to lower prices. The incomplete facade restoration faced more costs to complete than anticipated. In addition, the land lease needed to be modified to make it more financeable. The parties were able to agree on revised terms after several months of negotiations.
Mission Capital, a division of Marcus & Millichap, stepped in to secure the acquisition funding for Burnett Equity.
Meanwhile, retail brokers Danny Falk and Andy Kim have been hired to fill empty storefronts. Even before the lease deal was completed, they managed to score leases for as-yet-unnamed Korean-style cafés on the side of 32nd Street and an upscale American bistro on Broadway.
Shops and restaurants will open over the next year.
The prolific Anton said, “After a year of working on this complex deal during the dark days of Covid, I can’t wait to embarrass myself singing karaoke at the new Martinique. It will be the most fun hotel in town with five restaurants at the crossroads of Koreatown and Nomad.”
Industrious, which is expanding the workplace, has signed a 10-year partnership agreement of 43,874 square feet with 261 Madison Ave. It will occupy the entirety of the ninth and tenth floors, which were previously part of WeWork.
Landlord CEO Alex Sapir said: “As more businesses return to business and seek advanced space near transportation hubs, 261 and 260 Madison are poised to play a leading role in the recovery of Midtown offices.”
Doug Feinberg, Diligent Real Estate Director, said that small and medium-sized businesses are “looking for solutions to back-to-work plans” and that flexible space is the answer for many.
Industrious has provided workplaces for companies such as RR Donnelley, Cisco, Lyft, Spotify, Heineken, Chipotle, Pinterest and Salesforce.
CBRE represented both sides of the deal – Sacha Zerba and Alice Veer for the effort, and a team led by Peter Turchin and Greg Rothkin for Sapir.
Lefrak’s 40 W. 57th Street is a successful downtown tower that rarely has much space. 97 percent of the 800,000-square-foot space has been leased after five new leases were signed and renovated, totaling 100,000 square feet.
The largest 50,000-square-foot renovation deal was for Givaudan, the Swiss manufacturer of flavors, fragrances, and “active cosmetic ingredients.”
New leases have been signed for A&E Real Estate and Lightyear Capital, while Drasana Capital and Elmwood Asset Management Capital have expanded within the building.
The CBRE team led by Howard Fidel and Greg Rothkin represented Lefrak along with the in-house Lefrak team led by Marilou Burke.