NYC's Milford Plaza Hotel fetches $325M14 Mar, 2013 By: David Eisen
One of New York's older hotels has a new owner. A partnership of Deutsche Asset & Wealth Management's real estate investment business and David Werner have purchased the leased fee interest in The Milford Plaza Hotel in New York. The sale price for the ground lease is said to be around $325 million, according to reports.
Rockpoint Group and hotel operator Highgate Hotels are selling the property, which was bought in 2010 for $200 million, in three pieces, the Wall Street Journal reported last month. The two remaining pieces are a retail condominium and the 1,300-room hotel itself.
The investment is subject to a new 99-year ground lease and was acquired in an off-market transaction.
The hotel, located along 8th Avenue in Times Square, was built in 1928 and is in the process of nearing the completion of an extensive renovation that began in 2010.
"We are pleased to add this high-quality investment to our client's portfolio," Todd Henderson, head of real estate, Americas at Deutsche Asset & Wealth Management, said in a statement. "Acquiring the leased fee interest in a prime New York City location is expected to provide strong and durable long-term returns."
Buy New York
That Rockpoint and Highgate cleared $125 million on the deal speaks volumes on the state of New York real esatte. But paying such a premium seems a smart buy. According to PKF in its New York Hotel Horizons edition for March-May 2013, average daily rate of hotels in 2013 is forecasted to increase 7.3 percent to $269.70 helping to bolster revenue per available room to a predicted 6.3-percent increase on the year prior. However, this is coupled with a rise in forecasted supply in the city of 5.2 percent.
In 2012, New York hotels finished the year with a RevPAR gain of 6.1 percent. This gain was a result of only a 2.9-percent increase in ADR.
External Source : Real Estate Weekly
Reproduction in whole or part is prohibited.