A group backed by Morgan Stanley seems to be in the mix to become Pakistan International Airlines (PIA)’s new financial adviser for the Roosevelt Hotel site in Midtown East, according to sources shared with the Post on Monday.
This consortium will take over from JLL, which stepped down last summer.
Recently, the Saudi Arabia-based Arab News reported that PIA, under the oversight of the Pakistani government, is evaluating proposals from seven potential advisors to help make decisions regarding the hotel’s future. The Morgan Stanley team is set to collaborate with CBRE, a major player in Manhattan’s commercial real estate sector.
However, there’s been no official word yet from PIA regarding its plans.
One official pointed out that owners of the Roosevelt have been mulling over different options for years without taking action, highlighting a degree of frustration.
The JLL team, led by regional CEO Peter Regardi, left the account last summer. The agency attributed JLL’s resignation to a desire to avoid potential conflicts of interest, as JLL represents multiple clients that have shown interest in the property.
Since JLL’s exit, PIA hasn’t announced any new financial advisors. Generally, the role of a financial adviser includes facilitating either a full or partial sale of the property. Arab News indicated that PIA plans to expedite the selection of new advisors this month.
Still, one skeptical investment analyst in Manhattan expressed doubts, noting this situation might be a “colossal waste of time,” largely because the property is tied to the Pakistani government, which experiences frequent leadership changes.
While conflicts of interest were cited regarding JLL’s departure, it’s not unusual for large Manhattan brokerages to navigate both sides of a deal, as it can simplify transactions.
It’s common for intermediaries to represent developers interested in the same area. Moreover, JLL’s roster of clients, which included various prominent developers, was well-known when PIA engaged JLL in February 2024.
Liguardi opted not to comment, and emails sent to PIA requesting clarification went unanswered.
As previously reported, the Pakistani government requires proceeds from the Roosevelt sale to help finance a $7 billion bailout deal with the International Monetary Fund.
The Roosevelt site, nestled between Madison and Vanderbilt streets and located between East 44th and East 45th Streets, is among the most valuable pieces of real estate in Manhattan, situated in an East Midtown corridor where high-profile tenants are moving to new office developments near Grand Central Terminal.
The vacant hotel sits next to the new JPMorgan Chase headquarters at 270 Park Avenue, the upcoming Boston Properties (BXP) tower at 343 Madison Avenue, and the still-unnamed SL Green development at the former Brooks Brothers store at 346 Madison Avenue.
Under Midtown zoning regulations, a new office tower on the Roosevelt site could span up to 1.8 million square feet, with incentives for significant pedestrian and transportation improvements.
Since June, the 1,000-room Roosevelt Hotel has been unoccupied after the city ended its agreement with PIA to operate it as an immigrant shelter.
PIA has shifted its approach to the property multiple times since acquiring ownership in 2000, considering options from selling outright to seeking a majority or minority development partner.
Most recently, Pakistani privatization official Mohammad Ali mentioned that the building may not be torn down right away, but could potentially be reopened as a hotel.
This suggestion brought laughs from hotel experts in Manhattan, who indicated it would take at least a year to rectify the situation left by a year of immigrant occupancy.
One source in the industry scoffed, remarking that by then, both the office and hotel markets may have undergone significant changes.
