Three-Year Condo Conversion Scheduled for NYC Waldorf Astoria

New York City’s iconic landmark hotel, the Waldorf Astoria, has announced that it will close for up to three years starting Spring 2017 to convert the majority of the hotel’s 1413 rooms into luxury condos, according to Bisnow. The extensive move will significantly decrease the hotel room count down to between 300 and 500, thus also eliminating hundreds of hotel jobs. Currently, the Waldorf employs approximately 1,500 hotel employees, including room-service, housekeeping and other hospitality jobs, many of which are now on the chopping block. Severance agreements have already been reached with many of the workers, at an estimated cost of $100 million or more.

One wouldn’t think that investing in NYC real estate would be risky, but Manhattan’s high-end condo market has been experiencing some shortfalls over the past year, with prices falling, and number of days on the market increasing. According to the Wall Street Journal, the number of contracts signed for units valued at $4 million or more fell 22 percent during the first 25 weeks of this year, compared with the same period last year. That said, the New York Plaza hotel converted to condos about a decade ago, and after a sales slump resulting from the financial crisis, some Plaza condos have rebounded and sold for tens of millions of dollars.

A law passed last year by the City Council prohibits hotels with more than 150 rooms from converting more than 20 percent of a given property into residential units, however that bill specifically exempted the Waldorf. Beijing’s Anbang Insurance Group had recently purchased the Waldorf for $1.95B in early 2015. Redevelopment costs are estimated at $1B.