The former Knickerbocker Hotel site near the heart of Times Square has become the latest Dubai World investment to go belly up, as well as the target of investors wanting to pick up the property at a discount price.
Istithmar World Capital, the private-equity arm of the Dubai government's investment fund, recently handed back the keys to the 300,000-square-foot building at 42nd and Broadway to its lender, Danske Bank A/S, after defaulting on its $300 million mortgage. The property, which served guests like Italian tenor Enrico Caruso during its heyday, was part of the Dubai firm's ill-fated strategy of running "upmarket hotels in gateway cities," said a person familiar with the matter.
Noah Rabinowitz for The Wall Street Journal
The former Knickerbocker Hotel in Times Square has drawn interest because of its prime location.
In recent decades, the property has been operated as an office building known as 1466 Broadway. But Istithmar emptied it of most of tenants as part of a plan to convert it back into a hotel.
While there are plenty of struggling properties on the market, the building is attracting interest because it represents one of the best development sites in the Times Square area for a new hotel. Its appeal is enhanced because, besides paying $300 million for the building, Istithmar also spent $76 million to buy an adjoining vacant lot.
The bank has hired Jones Lang LaSalle to market the property and is getting a lot of interest, said Ben Singer a Jones Lang LaSalle broker. Among the interested bidders is Sitt Asset Management, the New York real-estate company that sold Istithmar the building in 2006, according to people familiar with the matter. Sitt executives didn't return calls seeking comment.
It is not only a well developed one,but also prestigious building in Dubai.Let us expect a good price for it.
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