X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-Morgan Stanley Real Estate’s Prime Property Fund has bought the New York Marriott East Side in Midtown from SHC New York Eastside II, LLC for $287 million. The 646-room hotel is at 525 Lexington Avenue.The city’s supply-constrained market attracted the fund to the property. According to Morgan Stanley Real Estate, the city’s lodging market has seen one of the highest increases in RevPAR among the top 24 hotel markets in the country at a time when hotels have undergone residential conversions. In addition, future growth is limited by the lack of available land and rising development costs, the company explains.”The addition of this premier hotel property to the Prime Portfolio increases the fund’s exposure to the lodging sector, which is experiencing significant growth in occupancy, average daily rates and revenue per available room,” Dave Hardman, managing director and head of US real estate investing for Morgan Stanley, says in a release. “Additionally, it allows Prime to gain entry into the supply-constrained New York market with Marriott International’s leading full-service brand.”A Morgan Stanley spokeswoman says the company could not release how long it took to do the deal, from contract to closing. She adds that the buy gives Morgan Stanley Real Estate its first hotel property in the city, although it owns the Westchester Marriott in Tarrytown.The 35-story hotel, located at 49th Street, was built in 1924 by Arthur Loomis Harmon as the Shelton Club Hotel. At the time it opened, it was the world’s largest hotel, according to the property’s website. The site features 629 rooms, 17 suites and 21,000 sf of meeting space in 19 meeting rooms. Prime Property Fund has been on a buying spree lately. Through the fund, Morgan Stanley Real Estate entered into an agreement in October to purchase the Chicago-based AMLI Residential Properties Trust for $2.1 billion, as GlobeSt.com previously reported. The deal is expected to close in the first quarter of 2006. Also last month, the fund purchased a 1.5-million-sf office portfolio from Chevy Chase, MD-based JBG Cos. for $644 million. The properties are in Washington, DC, Northern Virginia and Suburban Maryland, which GlobeSt.com also reported.Prime is a $4.5-billion diversified core real estate fund. Its assets include office, retail, multifamily, industrial, self storage and hotel properties in major markets throughout the US. SHC New York Eastside II is a subsidiary of Strategic Hotel Capital, LLC, a private company whose principal shareholders are affiliates of Goldman, Sachs & Co. and investors advised by Prudential Real Estate Investors.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.