Silverstein Team Buys Beekman Tower, Plans Renovation
- Feb 01, 2013
By Barbra Murray, Contributing Editor
The Beekman Tower Hotel in Midtown Manhattan has found a new owner and will soon find a new life. Silverstein Properties and a group of partners consisting of Fisher Brothers, Capstone Equities, Migdal Insurance Co. and Arkin Holdings have acquired the 174-room hotel from Lone Star for $82 million, and will transform the property into a luxury corporate apartment destination.
The two-building, 153,000-square-foot property at 3-7 Mitchell Place made its debut in 1929 as an affordable housing location for young women who had just arrived on the Manhattan career scene. And now, with Silverstein and Fisher acting as co-developers for the $25 million conversion endeavor, it is destined for a new incarnation. The target market for the new Silver Suites Residences at Beekman Tower will be guests looking for furnished, upscale, temporary living accommodations for 30 days or more. It’s a project that places Silverstein in one of its comfort zones.
“This is a product type that we already operate on the West Side of Manhattan in our Silver Suites Residences at Silver Towers (on West 42nd Street), so we thought that was the best use of this site, given its location and the nature and the size of the units,” Marty Burger, co-CEO of Silverstein, told Commercial Property Executive.
With Plaza Construction on the ground overseeing renovation activity, the partners will pay careful attention to maintaining the integrity of the Art Deco property’s façade, which holds a landmark designation from the Landmarks Preservation Commission. Architecture and interior design firm Stonehill & Taylor has been brought aboard to orchestrate the interior redesign of the connecting 26-story and 10-story structures.
With the ongoing strong demand for residential rentals across the country, the lending community is certainly drawn to traditional apartment projects, and in the case of Beekman Tower, it is apparently keen on corporate apartments, as well. Silverstein and Fisher had no shortage of financing options when setting out to buy Beekman Tower, which was marketed by Eastdil Secured on behalf of Lone Star. “There were many different lenders who wanted to provide the capital for this,” Burger revealed. “In fact, we had three lenders in the end who were very, very close and on top of each other. So we had really no issue in securing the debt for this project.” Cantor Commercial Real Estate ultimately provided an acquisition and development loan for Beekman Tower.
“We think with the strength of that submarket, being near the United Nations, this project will be really well received and we’re excited about it,” said Burger. “Plus, there’s the vast depth of the Midtown office market; when you just go a couple of blocks west, you’re right in the Midtown office market.”
In partnering up for the Beekman Tower project, Silverstein was able to pursue one of its current investment goals: joining forces with foreign investors, like Israel-based Arkin Holdings, a multi-faceted company with a focus on the pharmaceutical industry and its financial portfolio. “We’ve actually been doing a lot of work both trying to develop in Israel and bringing Israeli investors to the U.S.,” Burger noted. “New York has been such a strong place and a safe harbor for lots of foreign capital, and so that’s why we do seek not only domestic but foreign capital on our projects.”
Silver Suites Residences at Beekman Tower will welcome its first guests in September of this year with the introduction of 50 new corporate apartments to the market, followed by the debut of the remaining 124 units by early 2014.