In a surprising turn of events, the Trump administration announced on Thursday it has reached an agreement with the Pakistani government to jointly redevelop the Roosevelt Hotel located on Madison Avenue. It’s been described as an unsightly, vacant space with at least $1 billion in potential development value, according to real estate analysts.
The 22-story hotel between East 44th and 45th Streets has been closed since the pandemic hit. Former Mayor Eric Adams utilized the hotel to accommodate 1,000 immigrants until June of last year through a lease with Pakistan International Airlines (PIA), which has owned the hotel since 2000.
Stephen Witkoff, a special envoy from President Trump, played a role in negotiating the agreement, as indicated by Pakistan’s Ministry of Finance. Reuters was the first to report this deal.
Despite the announcement, many questions linger about the future plans for this notable location. How exactly will this partnership function? Who’s going to lead the efforts? These questions remain unanswered.
The lack of details from the White House only added to the speculation regarding what this deal really means.
One influential figure in Manhattan called the news “unbelievable.” Others suggested that this could be part of a long-term strategy involving Witkoff, who has previously helped finance notable hotels in Manhattan, including the Times Square Edition and the Faena near the High Line.
According to reports, the agreement between Pakistan’s Ministry of Finance and the U.S. General Services Administration (GSA) is not legally binding, but the GSA has yet to clarify the specifics of the deal.
The objective stated is to “capture the maximum value of this property.” This move is also aimed at enhancing the economic relationship between the two nations, supporting Pakistan’s efforts to privatize its assets.
The Pakistani government agency detailed plans for cooperating on the hotel’s operation, maintenance, and redevelopment. It’s notable that Pakistan is facing a significant debt of $7 billion to the International Monetary Fund and is in a race to liquidate assets.
The Roosevelt has a rich history, featuring in films like “The French Connection” and “Wall Street,” along with hosting Guy Lombardo’s band on New Year’s Eve for three decades. Nevertheless, the site is presently more valuable when considered as an office tower.
Located on a block between Madison and Vanderbilt streets and East 44th and 45th streets, this property sits in a prime area of New York’s office market, where new building rentals exceed $200 per square foot.
The ongoing development boom around Grand Central Terminal includes projects like One Vanderbilt and JPMorgan Chase’s new headquarters, not to mention another skyscraper in the works at 383 Madison Avenue.
At entitlement, the Roosevelt site could see construction up to 1.3 million square feet, and potentially even larger—nearly 2 million square feet—if zoning changes are pursued for size bonuses tied to public amenities and transportation.
Real estate experts suggest the land alone could easily command $1 billion if sold outright.
However, PIA’s strategy for the Roosevelt has confused industry observers for years. Officials have pondered whether to sell the hotel, reopen it, or find a development partner or equity investor.
A couple of years ago, PIA partnered with the brokerage firm JLL to explore its options, eventually deciding to sell, although the outcome of that campaign is still unclear.
Meanwhile, interest has reportedly come from companies like Tishman Speyer and SL Green, but it’s uncertain whether any formal offers have been made.
Interestingly, PIA and JLL parted ways last year, though the reasons for their split remain murky.
