MCR Hotels, the third largest hotel owner-operator in the US, has agreed to a £275 million deal to buy London’s iconic BT Tower from BT Group, with plans to repurpose the Grade II-listed structure into a hotel.
The US hotel giant is working with Camden-based Heatherwick Studio to explore options to convert the building into a hotel, having been used previously as offices by BT and the Post Office. The tower, at 60 Cleveland Street, is in Fitzrovia and has a net internal area of circa 213,000 square feet, across 34 floors.
MCR said that BT will take a number of years to vacate the building, “due to the scale and complexity of the work to move technical equipment”. It added there will be “significant time for design development and engagement with local communities" before it submits proposals.
The business, established in 2006 by Tyler Morse, has a $5 billion portfolio of 150 hotels and owns many of New York’s best-known hotels, including The High Line Hotel, a former seminary, and the TWA Hotel at JFK Airport, Eero Saarinen’s converted 1962 landmark Flight Center.
Morse, chief executive and owner of MCR, said in a statement: “We are proud to become owners and custodians of the iconic BT Tower. We will take our time to carefully develop proposals that respect the London landmark’s rich history and open the building for everyone to enjoy.”
The hotel operator has suggested that it will treat its makeover of the BT Tower in a similar way to its redevelopment of the TWA Hotel in Manhattan. It added: “We see many parallels between the TWA Hotel and the BT Tower. Both are world-renowned, groundbreaking pieces of architecture.”
BT Tower was opened by Prime Minister Harold Wilson in 1965 and was open to the public until 1971, when it was bombed, with a restaurant making use of the revolving top floor. BT moved into the tower in 1984, with its top floor hosting corporate and charity events, and its “infoband” screen displaying messages across London.
BT Group has outlined plans to simplify its operations and lower costs across the company, including reducing the number of offices in its estate from more than 300 to around 30. The company, in a separate deal, sold its former headquarters, BT Centre, in July 2019 for £210 million and moved into a headquarters in 2021 at One Braham in Aldgate. The Tower deal is part of the simplification of BT Group’s property portfolio.
The business explained that its fixed and mobile networks now deliver most of its operations, despite being originally delivered by the tower. It said this meant the building had served its purpose as a telecoms tower, with the structure's microwave aerials removed more than a decade ago.
Cristina Balekjian, CoStar director of hospitality analytics in the UK, said MCR’s redevelopment of the BT Tower served as another example of former office properties being converted for other uses in key cities, but highlighted the challenges of the scheme.
"The acquisition is an interesting buy for a potential hotel and will certainly be an iconic and attractive destination for those looking for a unique experience in London once it is converted. It will be interesting to see how the redevelopment progresses, given its Grade II listed status, since it could pose some challenges due to restrictions that come along with such a building.
“It is an exciting project nonetheless and it will give a new lease of life to the building, as we have seen with other office properties that are due to be converted to hotels in the near future.”