No decision yet on demolition of New York’s Roosevelt Hotel, says Pakistan

Pakistan has not yet confirmed plans to demolish the historic Roosevelt Hotel in New York as the government continues to evaluate options for the future of the state-owned property.

Muhammad Ali, advisor to the prime minister on privatization, when contacted by Nukta said that the final decision on Roosevelt would be taken after the appointment of financial advisor and their evaluation.

The century-old hotel, owned by Pakistan International Airlines (PIA) through its investment arm PIAIL, is one of Pakistan’s most valuable foreign real estate assets. Closed since 2020 due to financial losses, the 1,015-room property has since been used intermittently, most recently as a temporary shelter for asylum seekers under a short-term lease with New York City that concluded in 2024.

Authorities are weighing multiple options, including a joint venture model that would allow Pakistan to contribute the land while a private partner brings in equity to redevelop the site. One possibility under review is the demolition of the building to construct a high-rise tower, though a final decision will depend on an upcoming feasibility assessment.

The Pakistani government is expected to appoint a new financial adviser within weeks to guide the process, following the resignation of Jones Lang LaSalle (JLL) in September due to a conflict of interest. Seven consortiums, comprising leading global firms, have submitted proposals for the advisory role.

The selected firm will conduct an independent evaluation of the site and advise the Privatization Commission and federal cabinet on the most viable path forward.

Officials said the option to retain and operate the hotel remains under consideration if it proves financially feasible. A decision is likely to be taken after the financial adviser presents their findings.

The government is expected to finalize a new adviser likely before the turn of this month, after receiving bids from seven groups, including Greysteel, B6 Real Estate Advisers and Kirkland & Ellis LLP; CBRE, Morgan Stanley, Paul Hastings and Goldman Harris LLC; Ankura, Bank of Punjab, Baker McKenzie and Orr, Dignam & Co.; Savills, MACRO, Cirtin Cooperman & Company LLP, Hogan Lovells, and Mohsin Tayebaly & Co.; Alvarez & Marsal Private Equity Performance Improvement Group LLC, Proskauer, and FGE Ebrahim Hosain (FGE-EH); Citi Bank, Cushman & Wakefield, Proskauer Rose LLC, and HaiderMota & Co.; and Newmark, Herbert Smith Freehills Kramer (US) LLP, and Peregrinvest LLC.

The Roosevelt Hotel, occupying a full city block on Madison Avenue and 45th Street in Manhattan, was acquired by PIAIL in 1979. While successive governments have proposed leasing, selling, or redeveloping the property over the past two decades, none of the plans have moved beyond the initial planning stages.

Prime Minister Shehbaz Sharif’s administration has placed renewed focus on privatizing or restructuring loss-making state-owned enterprises, including PIA and its associated assets, as part of commitments made to the International Monetary Fund (IMF) under a USD 7 billion loan program. The IMF is currently reviewing Pakistan’s performance under the program, with the next tranche of funding expected upon successful completion of the review.

In July, the Cabinet Committee on Privatization approved a joint venture transaction structure for the Roosevelt Hotel aimed at maximizing long-term value while offering flexibility and minimizing fiscal exposure. The plan includes multiple exit options for the government and is seen as a key component of the broader privatization agenda.

Officials involved in the process confirmed that the evaluation of technical bids is underway, after which the selected adviser will conduct a detailed study to help determine the hotel’s future. Final approval of any plan will rest with the federal cabinet.

The Roosevelt Hotel generated over USD 220 million in rental income from its temporary lease with New York City in 2023. However, no new revenue stream has been announced since the lease expired last year.