NEW YORK CITY—A wholly owned subsidiary of Hyatt Hotels Corp. has acquired a 100% interest in the 210-key Park Hyatt New York on the lower floors of Extell Development Corp.'s One57 residential development. The Hyatt subsidiary is paying about $390 million for the property, including pre-opening and related costs, which is being positioned as the US flagship of the Park Hyatt brand.
When the property was announced in 2010, it was a joint venture between Hyatt and Extell. Originally, Hyatt was to acquire a two-thirds interest, as CEO Mark Hoplamazian explained on July 31 during the hotelier's most recent earnings call.
At that time, the company was in negotiations to bump up its interest to 100%, Hoplamazian explained, citing a number of reasons. “First, whole ownership provides us more flexibility and control to recycle the asset at the right time,” he said on last month's call. “Second, whole ownership allows us the ability to purchase the hotel on an all-cash basis, which makes sense given our balance sheet and liquidity position. Third, whole ownership, as opposed to joint venture ownership, allows for the deferral of gains on certain hotels that we expect to sell.”
Located on West 57th Street across from Carnegie Hall, the Park Hyatt is expected to open later this month. Hoplamazian said on last month's call that the hotel's profile was strong “due to its location, the cachet and reputation of the building and the pace of residential sales on the floors above the hotel. We are excited about the opening of this flagship hotel, particularly as it comes just after two other notable openings, the Park Hyatt Vienna and the Andaz Tokyo Toranomon Hills.”
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