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Sheraton Hotel New York

(NEW YORK, NY) -- The 60-year-old, 665-room, 22-story Sheraton Manhattan at Times Square hotel sits on one of the most expensive real estate sites in New York City - and owner Starwood Hotels & Resorts Worldwide (NYSE:HOT) knows it.

In an announcement today, Starwood officials confirmed they are studying redevelopment plans for the 395,000-square-foot hotel site that covers a full city block, bounded by Broadway, Seventh Avenue and 51st and 52nd Street near Times Square.

The planned project is the largest New York City commercial real estate development venture disclosed this year, city officials acknowledge.

The property is in the theater and business districts, one block off Broadway, at 790 7th Avenue 51st Street.

The estimated $1 billion-plus project could employ thousands of workers at its construction peak and require the services of hundreds of various vendors and suppliers - but no tentative ground breaking date is yet in the works, company officials said.

"Starwood is committed to maximizing the value of its owned assets around the world. The Sheraton Manhattan occupies a highly sought after piece of real estate in a prime location, and we're excited about the prospect of redeveloping it into a flagship Starwood hotel," said Simon Turner, President of Global Development for Starwood.

Times Square

"This will complement our existing portfolio in Manhattan's Time Square area that includes the landmark Sheraton New York Hotel & Towers, Westin Times Square and W Times Square as well a the soon-to-open Element Times Square West."

The redevelopment could include a new Starwood-branded hotel, office, retail and residential, Starwood officials said.  The old hotel might be demolished or it could be redesigned and remain where it is, they said.

Officials are receiving "strong interest" from investors and developers to partner on the planned project.

Later this fall, work will begin on the $90 million renovation of the 1,500-room Sheraton New York Hotel & Towers, across the street from the Sheraton Manhattan.

As the Sheraton Manhattan site is redeveloped, Starwood will remove the Sheraton flag and operate the hotel as a non-branded Starwood property beginning in April.

Sheraton Manhattan at Times Square - Map

The hotel will remain open as the company finalizes redevelopment plans, and will continue to be a member of the Starwood Preferred Guest loyalty program.

Simon said Starwood made the decision to operate the hotel as an independent because the hotel does not currently meet the upgraded standards of the Sheraton brand, which is culminating a three-year, $6 billion dollar global overhaul.

"As part of the revitalization of Sheraton, Starwood's largest and most global hotel brand, the brand has removed 32 "off brand" hotels in order to improve its quality and consistency, and reflect a significantly enhanced guest experience," Simon said.

Starwood officials said the redevelopment of the Sheraton Manhattan is illustrative of Starwood's bullish growth plans in New York City.

Starwood has more hotels in New York City than anywhere in the world and currently operates 13 hotels here with plans to open six more in 2010, including two new high-profile Sheraton properties in Brooklyn and Tribeca, the W New York Downtown and the Four Points by Sheraton Long Island City.

In addition, the global hotel giant will debut its two newest brands in the Big Apple with the openings of Aloft New York Brooklyn and Element New York Times Square West, bringing its total number of New York City properties to 19.

Beyond New York City, Starwood expects to open 80-100 high quality new-build and conversion hotels in 2010, coming off of the 83 opened and 77 new deals signed in 2009.

Of these new hotels, roughly 70 percent will be outside of North America, with the majority in Asia Pacific. And Starwood's upper upscale and luxury brands are leading the charge, representing more than 60% of the new openings. Among these hotels and resorts is expected to be its 1,000th property globally.

Starwood Hotels & Resorts Worldwide, Inc. currently operates 982 properties in more than 100 countries with a total staff of 145,000 employees.

Starwood Hotels is a fully integrated owner, operator and franchisor of hotels, resorts and residences with the following internationally recognized brands: St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points by Sheraton, and the recently launched Aloft, and Element SM.

Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts.

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