The Wall Street Journal (1/24/2019): 

The developer behind trendsetting hotels in Manhattan’s NoMad neighborhood has acquired the Parker New York hotel, looking to bring some of its downtown success to a midtown strip known more for opulent residences than hip lodging.

Real-estate firm GFI Capital Resources Group and Elliott Management Corp., a hedge fund and activist investor, closed Wednesday on the purchase of the 729-room hotel for about $420 million, GFI Capital said. The joint venture purchased the hotel from the family of the late Jack Parker, a hotel and property developer.

The venture plans to spend an additional $100 million to make over the 37-year-old hotel and convert many of the rooms into private residences.

The hotel has entrances on West 56th and West 57th streets, so-called Billionaires’ Row because of the ultrahigh end condominiums built along the street and around the southern end of Central Park.

The partners expect to revamp the underground retail space, but their plans are still evolving, said Allen Gross, chief executive of GFI Capital. The popular Burger Joint, located in the hotel, will remain, he said.

The hotel has entrances on W. 56th Street and W. 57th Street, so-called Billionaires’ Row. The hotel will stay open during the renovation, which is expected to begin in 2020. It will be relaunched as a flagship of Hyatt Hotels Corp.’s Thompson Hotel brand in 2021.

The new owners have tapped New York-based architect Thomas Juul-Hansen to create about 67 residential apartments at the top of the building. The condos will have floor-to-ceiling windows and offer hotel services and amenities, GFI Capital said.

The project won’t be competing with its surrounding ultraluxury neighbors, Mr. Gross said. Most of the condos will be one-bedroom units with pricing possibly in the $2 million range, not $20 million or $30 million.

“The location is something to die for,” Mr. Gross said. “It’s Billionaires’ Row, and this piece of real estate is right smack in the middle of it.”

The joint venture secured $350 million in debt from Bank OZK to finance the acquisition and renovation, said Dustin Stolly, vice chairman at Newmark Knight Frank and part of the team that advised the joint venture on financing.

The Parker Hotel was part of the Le Méridien brand, originally a Paris-based hotel line that has struggled at times in the U.S. It was part of Starwood Hotels & Resorts Worldwide Inc., which was acquired by Marriott International Inc. in 2016. The Parker stopped operating under that flag about a year ago.

Bjorn Hanson, a hotel-industry consultant, described the Parker as a “quiet hotel” of less prominence and name recognition than other hotels of similar size and in similarly well-located addresses.

Hyatt can bring “a reservation system, loyalty program, group sales and international sales to a hotel that has not had those types of supports,” Mr. Hanson said.

GFI Capital’s affiliate developed the Ace Hotel New York and the NoMad Hotel more than a decade ago. Their open lobbies, public spaces and free Wi-Fi helped accelerate the trend of hotels evolving into popular spots for freelancers and other locals to work, much like co-working spaces.

The hotels also helped spur condo, trendy restaurants and other development in the previously shaggy NoMad neighborhood, which primarily had been populated with wholesale stores.

GFI Capital later applied a similar approach when it joined forces with Elliott Management to revamp a long-vacant 19th-century, lower Manhattan building into what is now the posh Beekman hotel.

While Elliott Management has a reputation for buying shares in companies such as eBay Inc. and pushing for change, the $34 billion hedge fund also has invested in the real-estate sector. Since 2009, the firm has made about $9 billion in direct commercial real-estate investments in the U.S., Europe and Asia in addition to investments in real-estate securities.

The team’s new project comes at a time when average daily hotel rates in Manhattan have begun to rise after several years of declines, as construction continues to increase the supply. Last year, the average daily rate rose to $281.09, up 2.6% from the previous year’s $274.08, according to analytics firm STR.”

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