I stayed at the Mayorazgo in July 2001. It is just off the Gran Via on a little side street not far from Plaza de España. All of which may mean nothing to you. It was the first place we ever stayed in Madrid. If it has not been refurbished, it is stretching it to call it a four star hotel. They probabaly get the rating because they have a bar, and probably a restaurant although I don't remember it. There is a nice tapas place in the plaza in front of the hotel. We would go there for sangría when we lived in Madrid.
Having said all of this, and not knowing how many are in your party, you would be much better served by staying at
Hostal Adriano . Better area, better rooms, better price. You do have to walk up four flight of stairs, but if you are up for that, I would recommend it ahead of the Mayorazgo without hesitation. A hotel that I WOULD recommend that is on the Gran Via, but you won´t get it for 85 Euros per night, is the Emperador. If you get a rate of 85 Euros, stay there. They have pool on the roof with a nice view, and very large rooms.
Good luck!!