Situated on the corner of York, King and Clarence Streets this was a "folly" by the Brothers Grace who gambled that the advent of the Sydney Harbour bridge would see a slight shift in the location of retail trading in the city. There had been much horse-trading in the corridors of power re the location of City Circle underground train stations with the Mark Foy family supporting the Museum location and the Lloyd Jones family supporting the St James location. Grace Brothers opened their new York Street store in July 1930. The entire ground floor was given over to retail.
Based on the design features of the Chicago Tribune building, the Grace Building was one of the first in Sydney to be clad in glazed terra cotta and marked the high point of the Commercial Gothic style, the immediate precursor of art-deco. Within the Gothic style, there are extensive art-deco elements.
The building has a distinct vertical emphasis with a Gothic corner tower, with flying buttresses, pointed windows and quatrefoils, with details picked out in green. It was designed by the architectural firm of Morrow & Gordon and constructed by Kell & Rigby. The building was extensively refurbished in 1995 and opened as The Grace Hotel in 1997. Although of immense beauty, the exterior of the building (up high) shows much chipping and damage to the tiling.