As New York’s buzzing with tourists again after the fallout of the pandemic, the landmarked Rockefeller Center is planning to convert part of an office tower into the complex’s first hotel.
Aspen Hospitality, which operates the Little Nell, billed as Aspen, Colorado’s only five-star, five-diamond luxury boutique hotel, intends to open a 130-room hotel across 10 floors at the 16-story 10 Rockefeller Plaza, an Aspen Hospitality spokesperson told CoStar News. The location will expand the Little Nell brand for the first time outside the Colorado ski resort town since opening in 1989, the spokesperson said, adding the New York location will be a hybrid business and leisure hotel.
Aspen Hospitality, which also owns Limelight hotels, is controlled by the Chicago-based Crown family, which owns Rockefeller Center along with global real estate developer Tishman Speyer. The pair have been in discussion for years about a possible hotel at Rockefeller Center, according to Aspen Hospitality’s spokesperson.
The proposed Little Nell in Manhattan would occupy 10 vacant floors at 10 Rockefeller above NBC Studios, where it tapes the “Today” show, a Tishman Speyer spokesperson told CoStar News.
The Wall Street Journal earlier reported the planned hotel opening.
The plan to redevelop the office tower as a hotel comes at a time when Manhattan’s retail and hospitality sectors have shown signs of rebound from the pandemic even as the slow return-to-office rate has sent New York’s average office vacancies to what CoStar data shows as record highs. The trouble in the office sector and remote working trend have spurred talk from both city and state governments as well as the real estate industry about office conversions for residential and other uses.
In another example, nearby the Rockefeller Center in Times Square, SL Green Realty, Manhattan’s largest office landlord, has partnered with Caesars Entertainment to pitch a casino and hotel resort to redevelop the office tower at 1515 Broadway, between West 44th and 45th streets.
The Plaza District, the largest U.S. office market and where 10 Rockefeller sits, has an office vacancy rate of 13.3%, above even the city average of 12.8%, CoStar data shows. Office rents have posted average annual declines in both the Plaza District and the city.
Rockefeller Center, with an array of retail shops, restaurant and entertainment options, looks to be faring better. The complex’s 7% office vacancy rate is about half that of midtown Manhattan’s average, and its retail space is 95% leased, also outperforming the 75% rate on the Fifth Avenue shopping corridor, the Tishman Speyer spokesperson said.
New retail tenants in the 14-building complex include record label Rough Trade; menswear designer Todd Snyder; food and drink establishments Le Rock and Pebble Bar; and Flipper's Roller Boogie Palace roller rink in the warm months.
“If New Yorkers are excited about what’s going on at Rockefeller Center—the restaurants, the retail, the art, the arrival of a hotel — then they will want to have their office here, they’ll want to shop here, they’ll want to come here,” E.B. Kelly, senior managing director at Tishman Speyer and head of Rockefeller Center, said in an emailed statement to CoStar News.
New York’s tourism arm, New York City Tourism + Conventions, has projected the city will see about 63.3 million tourists by the end of this year, up from 56.7 million last year and just shy of 66.6 million in 2019, helped by increases in both domestic and overseas visitors. By 2024, it expects the number of visitors to New York will rise to 69.6 million, topping even the pre-pandemic level.
On the retail front, Manhattan’s first-quarter average asking rent in the prime 16 retail corridors CBRE tracks rose for a third consecutive quarter to $638 per square foot, up 3.7% from the fourth quarter and 8% above a year earlier. The number of direct ground-floor availabilities fell for a seventh straight quarter, by 7.2% from the year-end quarter to 206 spaces and by 16.6% from a year earlier, CBRE said recently.
However, the plan for the Little Nell in New York will need to pass a threshold first before it can proceed. It will need a special permit that’s required after the New York City Council adopted the Citywide Hotels Text Amendment in December 2021 that would require the City Planning Commission to consider in some areas “a new hotel’s potential for adverse effects on use and development in the surrounding area before it can be established.”
Until the pandemic halted most new hotel construction in March 2020, new hotels outpaced other types of nonresidential development in some parts of New York with over 54,000 hotel rooms added from 2007 to 2020, a 73% increase from the years prior, according to data from the city.