Oct. 19 (Bloomberg) -- The Hotel Chelsea, a Manhattan landmark where Bob Dylan, Andy Warhol and Eugene O’Neill once lived, was put up for sale by the families that owned and operated it for more than 65 years.
“It is time to let a new owner, with perhaps some new innovative ideas and resources, to re-energize and revitalize the Chelsea,” Paul Brounstein, a shareholder and board member, said in a statement today.
The 12-story property has 125 hotel rooms, including a two-bedroom, two-bathroom suite where movie star Marilyn Monroe lived with playwright Arthur Miller. There are also 101 residential units, which include tenants who have lived in the building for decades and some who pay rent with their original artwork, general manager Arnold Tamasar said in an interview.
The corporation that owns the building, Chelsea 23rd St. Corp., hired Eastdil Secured LLC to market the hotel. In its listing, Eastdil touts the building’s “iconic status” and 800 square-foot (74 square-meter) rooms that a new owner could subdivide to increase the number of income-generating units.
“The name and history surely will add to the valuation of the place,” said Patrick Scholes, an analyst at FBR Capital Markets in New York. “The price will be based on how much income this hotel can make. Will people be willing to spend a few more dollars to stay in a room Marilyn Monroe or Andy Warhol slept in? Sure.”
The property is likely to appeal to a private investor rather than public real estate investment trusts, which tend to favor well-known brands, Scholes said.
The average unit size at the property is 575 square feet, according to the Eastdil listing. About a quarter of the units are bigger than 800 square feet.
“Given the property’s current configuration, flexible zoning, and ability to increase the number of keys, the opportunity provides investors a number of potential redevelopment and repositioning strategies,” reads the listing.
The hotel, located on West 23rd Street in the Chelsea neighborhood, was New York’s tallest building when it was built in 1883, according to the statement. It has 17,000 square feet of retail space and an 8,000-square-foot roof terrace that overlooks the East and Hudson rivers.
The building, converted into a hotel in 1905, attracted artists and writers throughout the 20th century. The famous guests and long-term residents included writer Thomas Wolfe, poet Allen Ginsberg and musicians Janis Joplin, Leonard Cohen, Jimi Hendrix and Jim Morrison.
It was also the site where Nancy Spungen, girlfriend of Sex Pistols bassist Sid Vicious, was found stabbed to death in 1978, and where writer Dylan Thomas died of alcohol poisoning in 1953, according to the hotel’s website.
“Whoever is going to buy it will likely keep the uniqueness of this hotel,” Scholes said. “It’s an iconic property.”
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