It's been called the "dirtiest hotel in New York City," but it still commanded a pretty price tag to acquire. According to multiple outlets, New York real estate mogul Joseph Chetrit has acquired the Hotel Carter in Times Square for $190 million.
Chetrit reportedly signed a contract last month to acquire the 600-room property on 43rd Street. The deal is expected to be completed in the next two months. Broker Eastdil Secured marketed the property.
The Carter has been named the "dirtiest hotel in America" three times by TripAdvisor and was put on the market in 2013 after its owner, Vietnamese businessman Tran Dinh Truong, died the previous year.
The acquisition price almost matches the amount needed toward a renovation. The hotel reportedly needs 125 million for safety and infrastructure upgrades.
Chetrit has amassed a large portfolio of commercial real estate in New York and other U.S. cities. He led a consortium last year in the $1.1 billion acquisition of Manhattan's Sony Building, which he is planning to convert partly into condominiums.
Like some hotels in the Times Square area of New York, the Hotel Carter went into decline during the 1970s, and, as The Wall Street Journal wrote, "remained notorious for petty crime and drug use even as much of the rest of the Theater District gentrified into a family-friendly tourist destination in the 1990s."
Even in the face of its salty reputation, word is nearly 24 other bidders competed for the hotel, which was designed by architect Emery Roth. The list reportedly included private-equity firm CIM Group, New York developer Aby Rosen and hotel-management company Highgate Hotels.
Why the competition for such a dilapidated hotel? Easy: location. Even during the economic downturn, occupancy rates for hotels in the Times Square area remained north of 80 percent. They have remained above 90 percent since April this year, according to STR.
The hotel had been under new management since 2013. “Our direction has been to focus on correcting all life-safety issues,” said John J. Cruz of Philadelphia-based GF Management, which took over the Carter in April 2013. He said 15 outstanding building code violations were “in varying stages of being addressed.”