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An old office building downtown is putting on the Ritz.
The owners of 17 Battery Place, which measures 1.2 million square feet, are negotiating with RitzCarlton International to open a 325-room hotel in the 98-year-old building. They are also planning to convert a portion of the site to luxury condominiums, while the lower floors will remain open to commercial tenants. The $100 million project is expected to be complete by 1999.
The project is just the latest example of how New York developers are learning to maximize their buildings' value by shaking up the tenant mix. By renovating office buildings to accommodate everything from hotels to hospitals, developers are able to charge higher rents. Portions of a building that are not suitable for other uses are being used for lower-paying office tenants.
"It's all about economics," says Steven H. Klein, a senior vice president at S L Green Realty Corp., the Manhattan-based real estate investment trust that recently bought the 800,000-square-foot office portion of 17 Battery Place.
"A hotel offers a much higher return on investment, but the neighborhood wouldn't support a 1.2 million-square-foot hotel."
Three-way division
When renovations are complete, 17 Battery Place--which is actually two separate office towers--will be divided three ways. The office segment will take up...