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Hotel Investments in NYC Saw Sharp Fall in 2012

Although last year the overall activity in the commercial sector in NYC was the most upbeat we’ve seen in 5 years, the hotel segment was far from boasting the same results.The sales volume dropped by 58%, totaling only $1.6 billion. This is a sharp fall from the results seen in 2011, but still at least twice the figure in either 2008 or 2009.

The number of transactions saw a 30% decrease year-over-year, with only 31 deals closed in 2012, while the median sale price also dropped by 78% over 2011, from $46 million to 10 million.

Brooklyn sees Median Sale Prices per Room Double

Despite median sale prices per room going down from $286,766 in 2011 to $194,143 in 2012 (a 32% decrease), Manhattan remains the leader for this segment.

However, its top position may no longer be that secure. Brooklyn managed to take the market by surprise, with the median sale price for its hotel rooms almost doubling. At $190,592, a record value for Brooklyn, this is now rubbing shoulders with prices registered in Manhattan.

The Biggest Hotel Transactions in NYC in 2012

There were only 4 large transactions of over $100 million in 2012, bringing in almost 50% of the total sales volume.

JW Marriot Essex House
JW Marriot Essex House

JW Marriot Essex House

160 Central Park South, Manhattan NY

Selling price: $349,538,000

Selling date: September 14, 2012

The 509 rooms at the former Jumeirah Essex House are again under JW Marriot ownership, a  50 year agreement having been signed. The hotel was purchased in 2005 by Dubai Investment Group for almost $100,000,000 more, and has seen some of its rooms turned into condominiums since then.

 

The Manhattan at Times Square Hotel
The Manhattan at Times Square Hotel

The Manhattan at Times Square Hotel

790 7th Avenue, Manhattan NY

Selling price: $271,600,000

Selling date: October 02, 2012

The all-cash buy of The Manhattan Hotel’s 665 rooms had as buyers, affiliates of Rockpoint Group, Goldman Sachs’ Real Estate Principal Investment Areas and Highgate Holdings.

 

 

King and Grove Hotel
King and Grove Hotel

King and Grove Hotel

29 East 29th Street, Manhattan NY

Selling price: $116,000,000

Selling date: May 31, 2012

In 2012, Chetrit Group bought 3 adjacent building parcels on East 29th Street among which was the hotel at 20 East 29th Street, formerly known as The Hotel Lola. The building was previously owned by Property Market Groups under the name of Hotel Thirty-Thirty.

 

50 central park
The Ritz Carlton

The Ritz Carlton Hotel

50 Central Park South, Manhattan NY

Selling price: $105,000,000

Selling date: Jan. 26, 2012

The 265 hotel room transaction was part of a recapitalization plan of Millennium Partners. Millennium sold the hotel to Westbrook Partners for almost $20 million more than the price it paid in 2006, when it first purchased the hotel from St. Moritz.

Some of the hotel rooms were transformed into luxury condominiums that sell separately.

 

 

Roxana Baiceanu

Roxana Baiceanu

Roxana is an associate editor with Multi-Housing News and Commercial Property Executive. In the past, she also created content for PropertyShark and Point2Homes’ blog pages. She also has 5 years of experience as a marketing copywriter.

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