MCR and Island Capital Group have jointly acquired the Sheraton New York Times Square Hotel, a 1,780-room hotel in the heart of midtown Manhattan, for $373 million from Host Hotels & Resorts. The purchase price equates to $210,000 per key, which is one of the lowest prices per room paid for fee simple hotel real estate in Manhattan over the past 13 years, according to the buyers.
As part of the deal, Host Hotels is providing a $250 million bridge loan to the buyers.
The Sheraton New York Times Square Hotel, located on Seventh Avenue between West 52nd and West 53rd Streets just seven blocks north of Times Square, is the third-largest hotel in New York City by room count. The property opened in 1962 as the Americana and became part of the Sheraton hotel brand in 1979.
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It has 62,000 square feet of event space and has hosted many events including the New York Democratic Convention.
The acquisition of the Sheraton New York Times Square Hotel follows Island Capital's and MCR's joint venture acquisition of The Lexington Hotel, Autograph Collection, a 725-room hotel located on the corner of Lexington Avenue and East 48th Street in the heart of Midtown Manhattan.
The Sheraton New York Times Square Hotel will remain part of the Sheraton brand family under a new long-term franchise agreement and will be managed by MCR. Island Capital and MCR plan to invest more than $100 million in the hotel's rooms, banquet areas and public spaces.
Host Hotels sold the property as part of its strategy of deploying capital into assets that will bolster its EBITDA growth profile, according to CEO James F. Risoleo. "Since the beginning of 2021, we have invested $1.6 billion in early-cycle acquisitions, and we have disposed of eight hotels at a value of $1.4 billion, including amounts due under seller financing," he said in prepared remark.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
