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NEW YOR CITY—Host Hotels & Resorts closed on its sale of the West New York Grand Central hotel, located at 212 E. 42nd St., for $302 million including approximately $20 million of furniture, fixtures and equipment. The buyer was Davidson Kempner Capital Management according to a November 2018 report in Real Estate Alert.
“We have been pleased with our continued execution of further reducing our exposure to New York, a key initiative set early on in my tenure as CEO,” says James F. Risoleo, president and CEO. He further states that with the completion of the sale, the REIT sold three assets and the retail, signage and theater condo space at the New York Marriott Marquis for $1.1 billion at very attractive pricing.
“We continue to strengthen our investment grade balance sheet and enhance our ability to make strategic investments that ultimately drive long-term value creation for our stockholders whether it is investing in our portfolio, acquiring assets, or buying back our stock,” says Risoleo.
JLL’s Jeffrey Davis represented Host in the sale, and Kevin Davis represented the buyer in obtaining $197 million in financing from Goldman Sachs, as reported in The Real Deal.
The property designed by architects Emery Roth & Sons, formerly known as the New York Helmsley, was once part of the hotel chain owned by Harry and Leona Helmsley. In 2011, Host purchased the building for $313.5 million. They re-opened it in October 2012 after completing $75 million in renovations.
In March 2018, when Host put the hotel up for sale, Real Estate Alert reported the REIT was “paring properties in markets with low or declining revenue growth, as well as hotels that are underperforming or in need of substantial renovation.” The article stated, “The Westin fits that bill.” It pointed out the hotel’s net income dropped 2% in 2017, and it was one of only four properties of the REIT’s 40 top performing hotels to post a decrease in revenue per room.
However, Real Estate Alert noted that the hotel was 87.4% occupied, generating $250.02 revenue per room, making it a top performer.
In November 2018, when Host agreed to the deal, Commercial Real Estate Direct reported that Host sold two other Manhattan hotels that year: the W hotel at 541 Lexington Ave. for $190 million to Capstone Equities and Highgate Holdings; and the W New York Union Square at 201 Park Ave. South for $171 million to Westbrook Partners.
Host currently owns 87 properties in the US and five properties internationally, totaling approximately 51,300 rooms.
Betsy Kim is the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
The Department of Financial Services new rules, Insurance Regulation 208, have been reinstated.
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