HOTEL king Ian Schrager has just worked out an agreement with Norman Sturner to turn the current, Class B office building at 1414 Avenue of the Americas into not just a two- or three-star establishment, but a “six-star” luxury Ian Schrager Hotel.
“We will empty the property and let him do his magic,” said Sturner of Schrager. Sturner’s own job, he said, is to be the “owner.”
Through expiring leases, the building will be “virtually empty” by 2010, when $100 million in development work could start.
The 1923-era, 18-story building on the southeast corner of 58th Street has great views of Central Park. It was built as a hotel and its penthouse roof deck is where the rock group Kiss held parties.
Sturner’s Murray Hill Properties and investor David Werner paid $120.5 million — or $873 a square foot — for the 138,000-foot building in 2007 and planned to empty it for residential or hotel redevelopment. The Kobe Club, owned by Jeffrey Chodorow’s China Grill Management, shut down there at the end of April.
But does the city need a new hotel?
Last April, hotel-room occupancies were a bountiful 87 percent. According to John Fox of PKF Consulting, the occupancy rate is expected to fall into the low 70-percent range. At the same time, room rates have dropped 20 percent to 25 percent, Fox said.
“It’s pretty significant. You can get a room, and on selected nights get it for $100, and I never thought I’d see that rate again,” he said. “Given where the market is right now, we probably don’t need [another hotel].”
But as occupancies rise over the next year or so, Fox says room rates will also start climbing, which means Schrager could open at just the right time.
Technically, a six-star hotel rating does not yet exist but it is the buzz number used for indescribable eye candy, like the sail-shaped, and service-driven Burj Al-Arab in Dubai.
While Schrager didn’t return calls to provide details of what he’s got planned, a closely placed source said, “You can expect a lot more activity from Ian over the coming months.”
Stay tuned.
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The Cushman & Wakefield capital markets team, as of yesterday, is finally and officially marketing 485 Lexington Ave. for SL Green Realty.
But whether C&W’s Fearless Foursome — Richard Baxter, Ron Cohen, Scott Latham and Jon Caplan — can get the $555 million that Sturner offered to pay for the property at the end of last year is another story.
In fact, we hear the new “ask” is $525 million.
The nearly 915,000 square foot building has $450 million in assumable financing through 2017. Citigroup is the lead tenant, but will begin subleasing floors.
Sturner, who declined comment, had brought in real-estate investment firm Carlton Group for a possible deal, but the firm apparently wants to remain on the sidelines.
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Industry rumors say fallen insurance giant American International Group is still sorting through the five to 10 second-round bids for its headquarters at 70 Pine St. and 72 Wall St.
Bidding, we hear, is around $100 a foot.
CB Richard Ellis’ Darcy Stacom and her colleague Bill Shanahan didn’t return calls for comment.
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The bankruptcy of Hickey Freeman parent Hart Schaffner Marx is providing some freedom to push and pull the retail at 666 Fifth Ave.
“We’re shuffling it up a bit,” said C. Bradley Mendelson of Cushman & Wakefield, who is overseeing the store leasing for owners Stanley Chera Crown Acquisitions, Carlyle and Kushner Cos.
Mendelson denied that Abercrombie & Fitch is trying to leave the 20,000-foot deal for a kids store.
But several other sources tell us they did want out a few months ago though now their deal is being reworked.
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A hairstylist to stars like Jennifer Garner, Selma Hayek, Renee Zellweger and Katie Holmes will soon move into the entire second floor of 545 Madison Ave, a Gold LEED-rated building for energy efficiency.
Sources tell us that Oscar Blandi will inhabit all 9,300 feet at a price point in the $80s a foot.
While building owners LCOR had been hoping for the $100s a while back, the final price is a great deal for a brand new retail space along Madison Avenue.
Newmark Knight Frank’s Ross Perlman represented Blandi, who will close the shop up the Avenue at 746 Madison.
A Jones Lang LaSalle team of Frank Doyle, Lisa Kiell, David Kleiner and Andrew Flint worked for the owners, who recently completed the major renovation work.
“No comments” all around. lois.weiss@nypost.com