British Airways Hotel Sells for $31M

Paul Fitzpatrick, senior managing director of Insignia/ESG Hotel Partners, handled the local marketing, procured the buyer and was the sole broker on the sale. Fitzpatrick Hotels will continue to manage the property, which is located at 127 E. 55th St.

The 37-story British Airways' hotel was one of the last "sliver" buildings constructed in the city. The 124-room property is located between Park and Lexington Avenues.

Fitzpatrick says the sale is atypical of transient hotel dispositions, and extraordinary even among airline-hotel transactions because of the 10-year exclusive occupancy agreement British Airways signed as part of the deal. Most airline hotels have occupancy agreements of six months to a year, he tells GlobeSt.com

Nevertheless, the transaction is an indicator of the local lodging sector's renewed vigor. "The market is coming back," Fitzpatrick tells GlobeSt.com. "Occupancy has come back stronger than rate, which is trailing right now. But there is a high degree of interest in Manhattan hotels. There's more capital than product," he adds.

Mark Gordon, managing director at real estate investment banking firm Sonnenblick-Goldman, cites the bidding war for the landmark Hotel Delmonico as evidence that the New York hotel market has heated up considerably since Sept. 11. (Donald Trump took the prize in a $115-million deal.) "Without question New York remains the number-one market for international hotel investors," Gordon tells GlobeSt.com.

Insignia/ESG Hotel Partners is part of Insignia/ESG Capital Advisors Group, which focuses on investment sales and debt financing for major properties of all types. Insignia/ESG is a subsidiary of Insignia Financial Group, Inc.