The Normandie Hotel, opened in 1942 and declared a national historic site in August 1980, has been put up for sale by owners Interra-Sky Normandie for $9 million, this media outlet learned exclusively on Tuesday.
According to the offering memorandum released by Newmark Grubb Caribbean, which has been exclusively retained by Interra-Sky to conduct the sale, the 97,000 square-foot hotel is being offered on an “as-is, where-is” basis. The seven-story property described as a “distressed asset” is being offered at a significant discount to the $39.5 million acquisition price paid in 2006.
“Closed in late 2009 due to the former owner’s inability to fund capital upgrades, the property currently stands as an unoccupied shell, ideal for a developer to finish mechanical, soft and hard good upgrades,” according to the investment memorandum, a copy of which was obtained by News is my Business.
To spur interest, the document outlines the potential incentives a new owner could receive, both from the U.S. and local governments. Under the Puerto Rico Tourism Development Act of 1993, the hotel’s new owners could qualify for tax exemptions or investment credits. The hotel is also eligible to receive U.S. Federal Historical Tax credits of 20 percent for eligible renovation costs.
“In total, we calculate this could be worth $8 million of incentives to reduce the overall capitalization of the project,” Newmark-Grubb Caribbean stated.
The Normandie Hotel, located at the entrance of the Puerta de Tierra district in San Juan between the Caribe Hilton hotel and the Luis Muñoz Rivera Park, features an unmistakable art-deco design inspired by the luxury ocean liner SS Normandie.
Designed by architect Raúl Reichard, the iconic triangular-shaped building — consistent with the bow of a cruise liner — began construction in 1938 and opened four years later. Among other distinct features, the Normandie has an open central atrium in its interior covered with translucent roof panels. Its 173 guestrooms are accessed via internal corridors that face the open atrium.
While the hotel has weathered decades of heavy storms and wear and tear, since its closing seven years ago, the property has shown signs of severe neglect. In April, the Normandie’s name — spelled out atop of the property in big white letters— was taken down “as part of routine maintenance,” government officials familiar with the decision said at the time.
Multiple brands, including W Hotels, Intercontinental, Aloft, Edition by Marriott, Morgan’s Hotel Group, Me by Meliá and Desires Hotels, have expressed strong interest in branding the property and have reviewed the hotel, the Newmark Grubb Caribbean memorandum noted.
The Puerto Rico Tourism Co. has confirmed the Normandie’s eligibility to obtain a casino license, which could add to a would-be owner’s profit margins, the company said.