New York’s century-old Roosevelt Hotel will soon close as a migrant intake center as the number of illegal crossings from the U.S. southern border has declined.
The iconic property, located at 45 E. 45th St. near Grand Central Terminal and the largest U.S. office cluster, is shutting down in the coming months after it opened in May 2023 as a major intake center, Mayor Eric Adams’ office said Monday in a statement.
Real estate firm JLL is marketing the property, owned by the Pakistani government, as a teardown. A spokesperson for JLL declined to comment.
When the Roosevelt debuted as a migrant hotel, New York received an average of 4,000 migrant arrivals each week before the number dropped in recent months to about 350 per week, Adams’ office said. The closing also comes as the Trump administration has tightened its grip on illegal immigration, leading to a decline in the number of border crossings.
City Hall plans to move intake functions from the Roosevelt to other locations. A spokesperson told CoStar News migrants who need shelter will be transferred.
New York, within the span of a year, is closing 53 sites and closing all of its tent-based facilities, Adams said. Many of the migrant shelters targeted for closing are also hotels, the city has said.
Migrant hotels at one point helped boost New York’s hotel occupancy rate as the industry sought rebound from damages of the pandemic. Fast forward, the city’s tourism has recovered back to 97% of its pre-pandemic level last year. The 12-month hotel occupancy rate has increased to its post-pandemic high of 84.5%, with the average daily rate having risen to a record high of $319.03, according to CoStar data.
Low impact seen
New York also has outpaced U.S. hotel industry performance. For instance, the occupancy rate rose to 70.6% in January, typically a slower month, from 68.5% a year earlier, in contrast to the U.S. average of about 52.5%, according to Jan Freitag, CoStar’s national director of hospitality analytics.
“New York has done really well,” Freitag said. The closing of the migrant hotels “is not going to impact the New York hotel industry very much.”
Most of the hotels that have served as migrant shelters have typically been on the lower end and in outer boroughs, he said. If some of the properties decide to return as hotels, existing or new owners “have to spend significant amount of capital on renovation and refurbishment” as “the wear and tear on the properties is substantial,” he said.
Over the past few years, about 16,000 rooms have been temporarily closed to be used as shelters for migrants, he said, adding that about 6,050 of those will be used as shelters in the long term, while 900 have reopened as hotel rooms. It remains to be seen what will happen to the future use of the remaining 9,000 rooms.
“The highest and best use of the piece of real estate may not be a hotel,” Freitag said, adding that some properties could be redeveloped as an apartment building. “There are a lot of wild cards.”
Other centers
There are still about 100 hotels in the city that are estimated to be housing migrants, down from over 160, Vijay Dandapani, president and chief executive of the Hotel Association of New York City, told CoStar News in an email.
Dandapani said the city is still “continually evaluating the needs” of its “migrant population and shelter system” and has yet to make a decision regarding some other intake centers such as luxury hotel Row NYC just west of Times Square.
“We expect the closing of the migrant processing center at the Roosevelt Hotel to not affect industry metrics,” he said. “It is a net positive for the area given its negative effect on perceptions for safety due to incidents at the hotel.”
Some of these properties will not be able to reopen as hotels given the preceding as well as increased costs of operating for insurance, real property taxes and the cost of financing, Dandapani said.
As to the future of the Roosevelt, JPMorgan Chase analyst Anthony Paolone said in a December report that the site, near prime office real estate including SL Green Realty’s trophy tower One Vanderbilt and JPMorgan's new headquarters at 270 Park Ave. under construction, may hold a different type of promise.
“It has essentially been a placeholder for a major office tower for many years,” Paolone said, adding that it could be attractive to SL Green for a ground-up development.
Pakistan International Airlines Corp. bought the 1,025-key hotel in 2006, according to CoStar data.