February 8, 2019
The Grand Hyatt New York, which represented Donald Trump’s first major development in Manhattan, could be torn down next year and replaced with a two-million-square-foot mixed-use project under a plan announced Friday morning. The MXU would be developed by a partnership of TF Cornerstone and investment firm MSD Partners.
The partners told the Wall Street Journal that no final agreement has been signed. The project would require the approval of the city and state.
Hyatt Hotels holds a 100-year lease on the property, just east of Grand Central Terminal along 42nd Street, expiring in 2077. TF Cornerstone and MSD reportedly plan to take over the lease, and use air rights they purchased in 2016 from GCT to develop the property, which would include a scaled-down Hyatt of 500 keys compared to the existing hotel’s 1298. It would be the fourth tower to go vertical under a 2017 rezoning of Midtown East, which sought to make the area more competitive with the new construction taking place on Manhattan’s Far West Side as well as south of Midtown.
Other components of the project would include office and retail. Trump, who redeveloped what had been the circa-1919 Commodore Hotel into the current Hyatt, exited his investment years ago.
“We are proud to support sustainable, transit-oriented development with new Class A office space, retail and a Grand Hyatt hotel adjacent to Grand Central Terminal,” said TF Cornerstone’s Jake Elghanayan. “The development will provide transit improvements that will transform the experience for hundreds of thousands of commuters every day.”
The announcement represents the second major potential change of ownership of a Grand Central-area property to come to light in recent weeks. Last month, the Abu Dhabi Investment Council and Tishman Speyer hired CBRE to market the iconic Chrysler Building for sale.
Iconic though the Chrysler Building is, though, it’s almost an illustration of the drivers behind the Midtown East rezoning. Dating from 1930, it’s not significantly older than the average age of building stock in the surrounding area.
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