Bids Are In, But Who Will Win at Hotel Chelsea?

hotel chelsea front desk Bids Are In, But Who Will Win at Hotel Chelsea?As The Observer predicted in October, it looks like the Hotel Chelsea is bound to become just another boutique spot.

Both Andre Balazs and Ian Schrager are said to be interested in the Chelsea, and now Page Six is reporting that “several bids are in but no deal has been struck.” Could this be the beginning of a bidding war for the heralded hotel asking $100 million?

A big sale is certainly possible, especially with record numbers of tourists in New York and the legacy at the Chelsea, but there are two problems facing any expensive take over–the tenants (as always) and the renovations. Page Six got the word from inside the red-brick behemoth:

“Management has already been whittling down the tenants,” a source said. “They would go in there and get building permits to renovate the rooms and then make them hotel rooms. They aren’t giving out long-term leases.”

One source predicted that the only way to avoid a lawsuit by tenants is to offer them cash. “It’s a complicated deal,” said the insider. “The building needs so much work. It’s going to cost a fortune to overhaul.”

A tenant buyout, eh? That shouldn’t be too hard.

mchaban [at] observer.com | @mc_nyo