Kensico Properties Eyes Conversion of 509 Madison Avenue Into 96-Key Hotel

New York-based development company Kensico Properties is eyeing a potential conversion in Midtown, but not to create housing. 

Kensico’s Marilyn Cafone submitted a rezoning application last week to convert and reposition the existing 21-story, 139,230-square-foot office building at 509 Madison Avenue into a 30-story hotel with 3,348 square feet of ground-floor retail space, according to a filing with New York City’s Department of City Planning.

The building between East 52nd and East 53rd streets was built in the 1920s and would be “well-suited for alteration and conversion to hotel use,” Kensico wrote in the filing. Plans for the project would include “recladding” the lower 14 floors and a partial demolition of the building, beginning on the 15th floor.

If approved, the hotel would comprise 96 rooms, as well as a lobby and amenity spaces, according to the filing.

“The applicant seeks a special permit to allow the existing, circa-1920s building on the development site to be repositioned as a new, world-class hotel, as a complement to the variety of commercial and other uses within the Midtown Manhattan central business district,” Kensico wrote in the filing.

Kensico, led by Nabil Chartouni, has owned the Midtown property since 1985, property records show. A spokesperson for Kensico could not be reached for comment. Crain’s New York Business first reported the news.

Current office tenants of 509 Madison include investment firm Banyan Tree Capital Management, private equity firm Yellowstone Capital Partners and Kensico itself.

Meanwhile, the building’s retail tenants include Spanish shoemaker Carmina and Xpress Barber Shop. It’s unclear whether those tenants will remain if the hotel conversion is approved.

News of the potential conversion comes during a busy time for office-to-residential projects in Midtown, especially after the New York City Council voted this month to adopt Mayor Eric Adams’s Midtown South mixed-use plan, which has the potential to create 9,700 new apartments in the area.

Those projects include SL Green Realty’s plan to convert the 34-story office building at 750 Third Avenue into 680 residential units, as well as The Feil Organization’s proposal to turn the 14-story office building at 140 West 57th Street into 47 apartments.

Isabelle Durso can be reached at idurso@commercialobserver.com.