Domain Properties Reports on Revitalized NYC Hotel …ww1.prweb.com/prfiles/2011/06/20/8584461/hotels_for_sale...NYC Properties 6 New Development 7 Renewed Interest 7 Changing Hands

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Domain Properties Reports

on Revitalized NYC Hotel Market

Domain Properties Reports

on Revitalized NYC Hotel Market

Spring/Summer 2011

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Contents

Gehr Development 3

NYC Hotels For Sale 4 Key Interest 6

NYC Properties 6

New Development 7

Renewed Interest 7 Changing Hands 8

Lower East Side 9

DiamondRock Development 10

Colorful Market 11 Designing a NYC Hotel 12

A New York Palace 13

Springtime in NYC Hotels 13

Recent NYC Hotel Transactions 14 Hotel Investment Convention NYC 16

Endless Opportunities 17

Overall Recovery 18

Manhattan Leads 18 Conclusion 19

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Domain Properties Reports on Revitalized NYC Hotel Market

Gehr Development

On June 2, Gehr Group announced that Gehr Development, its

real estate division, has acquired Four Points by Sheraton Midtown

Times Square for $112 million (almost $460,000 per room). Of

course, Gehr Development has expressed confidence already in the

New York City market with its previous purchases.

Gehr owns 488 rooms in Manhattan. The company's portfolio

includes Sky Room Times Square with the area's highest rooftop

lounge. In 2009, Gehr Development purchased the Fairfield Inn –

an adjacent property to Four Points (its latest NYC acquisition).

Spring 2011 has brought a record level of activity to the recovering NYC hotel market. An ever-increasing number of hotel deals point to a revitalized hospitality sector in New York City. The

promise of spring should extend into summer and bring further growth and development to ho-tels in the Big Apple. Alfred Somekh, President of Gehr Development, sums up the general opin-ion about the NYC hospitality industry.

"New York is the best hotel market in the United States and we will continue to grow our portfolio in Manhattan,"

says Somekh.

Four Points Hotel



http://www.gehrdevelopment.com/

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Four+Points+By+Sheraton+Manhattan+Chelsea,+West+25th+Street,+New+York,+NY,+United+States&aq=1&sll=37.0625,-95.677068&sspn=38.826758,79.013672&ie=UTF8&hq=Four+Points+By+Sheraton+Manhattan+Chelsea,+

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Sheraton+Towers,+Midtown,+Times+Square,+New+York,+NY,+United+States&aq=0&sll=40.746184,-73.994293&sspn=0.018175,0.038581&ie=UTF8&hq=Sheraton+Towers,+Midtown,+Times+Square,+New+York,+NY,+United+Sta





http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Sky+Room+Times+Square,+West+40th+Street,+New+York,+NY,+United+States&aq=0&sll=40.764356,-73.982406&sspn=0.017357,0.038581&ie=UTF8&hq=Sky+Room+Times+Square,&hnear=W+40th+St,+New+York&ll=40.756896,-


http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Fairfield+Inn+%26+Suites+New+York+Manhattan%2FTimes+Square,+West+40th+Street,+New+York,+NY,+United+States&aq=0&sll=40.756896,-73.992469&sspn=0.00868,0.01929&ie=UTF8&hq=Fairfield+Inn+%26+Suites&hne

http://www.domain-properties.com/Hotels_For_Sale_NYC.cfm

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Big+Apple+Hostel,+West+45th+Street,+New+York,+NY,+United+States&aq=0&sll=40.757205,-73.982148&sspn=0.007184,0.01929&ie=UTF8&hq=Big+Apple+Hostel,&hnear=W+45th+St,+New+York&ll=40.758327,-73.983586&s




NYC Hotels For Sale

Between April and June 2011, hotel transactions have reached an

intense level in New York City. Hospitality properties continue

to change hands. A recent HVS study found 54 major hotel

transactions (15,760 rooms) year-to-date 2011. If an investor is

considering hotels, there might be no time like the present to

make that move.

Algonquin Hotel The famous 174-room Algonquin Hotel has been bought and

sold four times in the past 15 years. Yet this landmark property

might be about to have new owners again in 2011. The Post

reports that HEI Hotels & Resorts will sell the 59 West 44th

Street property to Cornerstone Real Estate Advisers - a Mass

M u t u a l - o w n e d

investment group.

Cornerstone manages

37 hotels and holds a

debt portfolio of 34

loans on 45 hotels. In

2 0 0 5 , H E I

Hospitality bought

the Algonquin for

$ 7 4 m i l l i o n

($425,000 per room).

Algonquin Hotel



http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Algonquin+Hotel,+West+44th+Street,+New+York,+NY,+United+States&aq=0&sll=40.757709,-73.992555&sspn=0.008679,0.01929&ie=UTF8&hq=Algonquin+Hotel,+West+44th+Street,+New+York,+NY,+United+States&ll=40.7

http://www.nypost.com/

http://www.heihotels.com/





http://www.cornerstoneadvisers.com/







Cooper Square Hotel The 22-storey Cooper Square Hotel with its 2,900 square foot

penthouse and 1,300 square foot wraparound terrace is up for sale.

Special features of this magnificent property include a

2,300 square-foot ground floor, exclusive bar on the second floor,

4,000 square foot restaurant, and 360-degree views of the Bowery

and more. Designed by Carlos Zapata with custom interior

furnishings by Milan-based Antonio Citteri, the

Cooper Square Hotel is a rather new property.

Along with other NYC ventures, this hotel struggled during the

economic downturn. Yet things have turned around in

New York City. Mezzanine lender Westport Capital Partners

knew that the time is right for buyers and sellers. The Cooper

Square Hotel is expected to fetch a hefty sum.

The property should bring a higher price than even legendary

hotels like the Chelsea Hotel with its $80 million price tag. The

Cooper Square Hotel has no hotel management contracts in place

and the new owners can rebrand this hotel. The Cooper Square

Hotel is expected to attract considerable interest even from well-

known players in the hotel industry such as Ian Schrager and

Rocco Forte.

Cooper Square Hotel



http://www.cz-studio.com/index.php

http://www.antoniocitterioandpartners.it/

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hotels+near+Cooper+Square,+New+York,+NY,+United+States&aq=0&sll=40.758343,-73.982363&sspn=0.015961,0.038581&ie=UTF8&hq=Hotels&hnear=Cooper+Square,+New+York,+10003&ll=40.729194,-73.990366&spn=0.007

http://www.liquida.com/westport-capital-partners/

http://www.thecoopersquarehotel.com/




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Chelsea+Hotel,+West+23rd+Street,+New+York,+NY,+United+States&aq=1&sll=40.729194,-73.990366&sspn=0.007984,0.01929&ie=UTF8&hq=Chelsea+Hotel,+West+23rd+Street,+New+York,+NY,+United+States&ll=40.74836


http://www.ianschragercompany.com/

http://www.roccofortehotels.com/



Key Interest

Key investors are willing to buy into a NYC hotel – even if it is

recovering from previous challenges. This continued interest is

another positive sign of the healthy state of the New York City

market. Industry experts cannot deny the recent economic

turmoil but they are confident about the future of NYC hotels.

Purchasing a hotel is a major investment but buyers want to take

the plunge. The Big Apple is recognized as an established and

sound market over time. At present, the short term and long term

look profitable for hotel owners in this major center.

NYC Properties

New York City is a vibrant hotel market. In fact, buyers are even

picking up parcels of land in this dynamic environment. On

May 25, Sherwood Equities confirmed their purchase of a NYC

vacant development site in partnership with Fidelity Real Estate

Long-term occupancy and ADR percent changes – 12-month

moving average

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http://www.hotelsforsalenyc.com/


http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Big+Apple+Hostel,+West+45th+Street,+New+York,+NY,+United+States&aq=0&sll=40.757205,-73.982148&sspn=0.007184,0.01929&ie=UTF8&hq=Big+Apple+Hostel,&hnear=W+45th+St,+New+York&ll=40.758327,-73.983586&s

http://www.sherwood-equities.com/

http://www.pyramis.com/realestate/






Group for over $42 million. Situated at 356 10th Avenue, the

land is close to the West Side rail yards. The Related Companies,

recognized developer of the yards, is going ahead with plans for

the site.

New Development

New development can be witnessed everywhere in New York

City. The active pipeline is no longer at a standstill in this

thriving marketplace. New construction is becoming the norm in

the Big Apple. Industry experts say that these developments will

be economically feasible for investors. The state of the market is

perfect for NYC development.

Renewed Interest

The Sherwood and Fidelity purchase is an example of renewed

interest in NYC properties. Prior to the recession, real estate

investor Gary Barnett had assembled that parcel of land. Barnett

planned to build a mixed-use tower (over 60 stories) designed by

architect Steven Hall.

In 2010, Barnett returned the site to Barclays - the British bank

with about $30 million senior mortgage against the property.

Sherwood and Fidelity's acquisition of 356 10th Avenue could

look like a premium to the parcel’s senior mortgage. Today's

price, however, is much less than Barnett's original investment.







http://www.hotelsforsalenyc.com/Hotel-Real-Estate-News-NYC/Sherwood-Equities-acquired-Former-60-story-Hotel-Development-Site-Plans-by-Extell.html


http://www.extelldev.com/gary-barnett.html

http://www.barclays.co.uk/PersonalBanking/P1242557947640



Ryan Nelson, Sherwood’s senior vice-president of acquisitions

and development, elaborates on the benefit of their recent

NYC deal.

Changing Hands

Hotel Chelsea is another NYC hotel that changed hands amidst

the recent transaction frenzy. The new Hotel Chelsea proprietor

is New York real-estate investor Joseph Chetrit. According to

insider reports, the sale price was $80 million. Like so many other

hotel owners in New York City, Chetrit has more than one

NYC property in his portfolio. Recently, he upgraded the

Empire Hotel.

"We’re buying in at a very attractive cost basis that will allow us flexibility in our development plans,”

explains Nelson.

Park Central Hotel



http://www.hotelchelsea.com/


http://www.empirehotelnyc.com/home.php



Lower East Side

New York City is a flourishing hotel market. An in-depth look at

specific areas of the city gives a detailed perspective of the overall

situation. Recently, Brack Capital Real Estate acquired the

development site for its Manhattan project - a 290-room

Hotel Indigo at 180 Orchard Street. Their latest acquisition came

with a $46 million price tag.

The new boutique brand hotel is expected to open in 2013. This

Lower East Side venture is a joint project with InterContinental

Hotels Group - one of the hospitality industry’s most respected

groups. Issac Hera, chief executive of Brack Capital Real Estate,

explains the benefits of owing high-quality property in

New York City.

Generally, everyone benefits from NYC developments – hotel

owners, leisure tourists, corporate guests, surrounding

neighborhoods, and the city as a whole.

"This prime development site presents an untapped opportunity to create a project that will benefit neighborhood residents while adding value to the area overall,”

says Hera.

Long-term supply and demand percent changes – 12-month

moving average

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Supply % Change

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http://www.hotelsforsalenyc.com

http://www.brack-capital.com/ShowDoc.asp?MenuID=294

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hotel+Indigo,+180+Orchard+Street+NYC&aq=&sll=40.734555,-73.993706&sspn=0.063867,0.154324&ie=UTF8&hq=Hotel+Indigo,&hnear=180+Orchard+St,+New+York,+10002&ll=40.750703,-73.989916&spn=0.031926,0.07716

http://www.ichotelsgroup.com/




http://www.brack-capital.com/ShowDoc.asp?MenuID=294



InterContinental is responsible for renowned hotel brands such as

InterContinental Hotels & Resorts, Crowne Plaza Hotels &

Resorts, Hotel Indigo, Holiday Inn Hotels & Resorts, Holiday

Inn Express, and Staybridge Suites, as well as Candlewood Suites.

This company brings hotel brands to targeted markets across the

globe. InterContinental 'knows' hotels and recognizes the

continued potential and profitability of NYC hotels.

InterContinental Hotels group holds an extensive portfolio in

New York City. The company’s New York portfolio includes The

James New York Hotel (27 Grand St.), The Greystone Hotel

(212 W. 91st St.), The Olcott (27 W. 72nd St.), the Element

(555 W. 59th St.), and the Hilton Garden Inn (63 W. 35th St.), as

well as 15 Union Square West and 90 West St.

DiamondRock Development

DiamondRock Development is concentrating in earnest on the

NYC hotel market. On May 16, Diamond Rock announced that

the company has entered into a purchase and sale agreement to

acquire the 712-room Radisson Lexington Hotel New York for a

contractual purchase price of $335 million. The deal is expected

to close toward the middle of June.

During the Company's anticipated 2011 period of ownership, this

Paramount Hotel




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=InterContinental+Hotels+%26+Resorts&aq=&sll=40.765071,-73.989916&sspn=0.031919,0.077162&ie=UTF8&hq=InterContinental+Hotels+%26+Resorts&hnear=&z=14&iwloc=A

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Crowne+Plaza+Hotels+%26+Resorts&aq=&sll=40.750703,-73.989916&sspn=0.031926,0.077162&ie=UTF8&hq=Crowne+Plaza+Hotels+%26+Resorts&hnear=&ll=40.765071,-73.989916&spn=0.031919,0.077162&z=14&iwloc=A




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hotel+Indigo,+West+28th+Street,+New+York,+NY,+United+States&aq=0&sll=40.765071,-73.989916&sspn=0.031919,0.077162&ie=UTF8&hq=Hotel+Indigo,&hnear=W+28th+St,+New+York&ll=40.747452,-73.993649&spn=0.00

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Holiday+Inn+Hotels+%26+Resorts&aq=&sll=40.747452,-73.993649&sspn=0.007982,0.01929&ie=UTF8&hq=Holiday+Inn+Hotels+%26+Resorts&hnear=&z=16&iwloc=A

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Holiday+Inn+Hotels+%26+Resorts&aq=&sll=40.747452,-73.993649&sspn=0.007982,0.01929&ie=UTF8&hq=Holiday+Inn+Hotels+%26+Resorts&hnear=&ll=40.749663,-73.993649&spn=0.007982,0.01929&z=16&iwloc=B




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Staybridge+Suites,+West+40th+Street,+New+York,+NY,+United+States&aq=0&sll=40.749663,-73.993649&sspn=0.007982,0.01929&ie=UTF8&hq=Staybridge+Suites,&hnear=W+40th+St,+New+York&ll=40.757173,-73.991697

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Candlewood+Suites+Extended+Stay+Hotel+New+York+City++Times+Square,+New+York,+NY,+United+States&aq=0&sll=40.757173,-73.991697&sspn=0.007981,0.01929&ie=UTF8&hq=Candlewood+Suites+Extended+Stay+Hotel&

http://www.hotelsforsalenyc.com

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=TheJamesNewYorkHotel&aq=&sll=40.760326,-73.985109&sspn=0.031921,0.077162&ie=UTF8&hq=TheJamesNewYorkHotel&hnear=&z=13&iwloc=A




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=The+Greystone+Hotel&aq=&sll=40.741503,-73.994959&sspn=0.06386,0.154324&ie=UTF8&hq=The+Greystone+Hotel&hnear=&ll=40.796138,-73.984337&spn=0.067056,0.154324&z=13&iwloc=A

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=The+Olcott&aq=&sll=40.796138,-73.984337&sspn=0.067056,0.154324&ie=UTF8&hq=&hnear=Olcott,+Niagara,+New+York&z=13

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Element+near+555+West+59th+Street,+New+York,+NY,+United+States&aq=0&sll=43.337834,-78.714757&sspn=0.064424,0.154324&ie=UTF8&hq=Element&hnear=555+W+59th+St,+New+York,+10019&ll=40.772124,-73.989444&

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hilton+Garden+Inn,+63+West+35th+Street,+New+York,+NY,+United+States&aq=0&sll=40.772124,-73.989444&sspn=0.007979,0.01929&ie=UTF8&hq=Hilton+Garden+Inn,&hnear=63+W+35th+St,+New+York,+10018&ll=40.7514

http://www.drhc.com/


http://www.lexingtonhotelnyc.com/



property is expected to earn approximately $15.8 million in EBITDA.

Highgate Hotels, the hotel's operator, will retain its management

under a specific agreement. Most likely, DiamondRock figures that it

has funded a jewel of a deal with this latest purchase.

The hotel is located in a prime location at the corner of

Lexington Avenue and 48th Street in the heart of Midtown

Manhattan. The Radisson Lexington is in excellent condition. Its

present owners had invested $54 million into the property during

the past twelve years.

As a further show of confidence in the NYC hotel market,

DiamondRock Hospitality has agreed to purchase the former

Knickerbocker Hotel at 1466 Broadway. The asking price would

be based on the number of rooms approved for construction. The

price tag would be between $112.5 million and $135 million.

Colorful Market

The Dutch hotel chain, CitizenM, plans a huge "budget luxury"

hotel (90,000 square feet, 315 rooms) at a site on the Bowery and

New supply – january 2008 to march 2011

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2011, 04

Number of hotels

Number of hotels



http://www.highgatecareers.com/


http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=TheRadissonLexington&aq=&sll=40.751451,-73.986676&sspn=0.007981,0.01929&ie=UTF8&hq=TheRadissonLexington&hnear=&ll=40.755856,-73.975539&spn=0.007981,0.01929&z=16&iwloc=A



http://www.citizenm.com/



Delancey Street. This innovative hotel hopes to attract "mobile

citizens of the world" who are seeking "affordable luxury." The

rooms are expected to have wall to wall windows, LCD

flatscreens, rainshowers, oversized beds, and a unique feature -

rooms (controlled by "mood pads") that can change colors. This

interesting project will begin soon and be completed by 2012.

Designing a NYC Hotel

Spring/summer 2011 is shaping up to be one of the most exciting

periods in the New York City hospitality industry. New

developments, innovative accommodations, and major renovations

have surfaced everywhere in the city. Even the landmark MetLife

Clock Tower (modeled after St. Mark’s Campanile in Venice) is

getting a new look. This NYC building is changing from clock

tower to luxury hotel with the help of designer Tommy Hilfiger

who bought 5 Madison Avenue for $170 million.

In the hotel industry, the commercial segment would register

the strongest growth in 2011

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Meeting & Group; 25%

Leisure; 20%Commercial;

55%



http://www.nytimes.com/2011/05/06/nyregion/hilfiger-plans-a-manhattan-hotel.html?_r=1




http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=St.+Marks+Campanile&aq=&sll=40.763121,-73.98365&sspn=0.063839,0.154324&ie=UTF8&hq=St.+Marks+Campanile&hnear=&radius=15000&ll=45.439417,12.33902&spn=0.124303,0.308647&z=12&iwloc=A



A New York Palace

Every category of hotel works in New York City. The market is

'there' for all types of lodging in this metropolis. CitizenM's recent

acquisition emphasizes budget luxury while Northwood Investors

LLC seeks out world-renowned luxury with its purchase of the

New York Palace Hotel. This 899-room upscale Manhattan

property is selling for $400 million ($444,938 per room).

Springtime in NYC Hotels

Early spring saw the beginning of a surge of activity in hotel

transactions. One of the spring sales involved the sale of Holiday

Inn Express Wall Street at 126 Water Street and Hampton Inn

Financial District. Hotelier Sam Chang’s Metro Six Hotel LLC,

an affiliate of McSam Hotel Group, sold the hotels to

Pennsylvania-based Hersha Hospitality.

The 112-room Holiday Inn Express Wall Street was bought for

about $36.7 million ($328 thousand per key) plus closing costs

and fees. The sale price was paid in cash and the hotel was

purchased unencumbered by mortgage debt. As well, Hersha

Hospitality purchased the 81-room Hampton Inn Financial

District for $32.4 million.



http://www.northwoodinvestors.com/




http://www.newyorkpalace.com/

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Holiday+Inn+Express+Wall+Street&aq=&sll=45.439417,12.33902&sspn=0.124303,0.308647&ie=UTF8&hq=Holiday+Inn+Express+Wall+Street&hnear=&radius=15000&ll=40.723584,-74.006996&spn=0.127754,0.




http://www.corporationwiki.com/New-York/Rego-Park/metro-six-hotel-l-l-c-5136331.aspx

http://www.mcsamhotel.com/

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hersha+Hospitality,+North+2nd+Street,+Harrisburg,+Pennsylvania,+United+States&aq=3&sll=40.723584,-74.006996&sspn=0.127754,0.308647&ie=UTF8&hq=Hersha+Hospitality,&hnear=N+2nd+St,+Harrisburg,+Pennsy

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Hampton+Inn,+Pearl+Street,+Financial+District,+New+York,+NY,+United+States&aq=0&sll=40.284188,-76.900129&sspn=0.032149,0.077162&ie=UTF8&hq=Hampton+Inn,&hnear=Pearl+St,+New+York&z=11&iwloc=A






Recent NYC Hotel Transactions

On June 1, Related Companies transferred space in the 60-storey

MiMA tower to Yotel - the European pod hotel chain. On

June 3, Yotel opened the doors to a 669-room hotel offering

170 square feet rooms for about $150 per night. The European

company paid $263 million for their new space in

New York City.

Situated at 5 West 46th Street NY 10036, the 597-room Paramount

Hotel, one of the biggest boutique hotels in the hospitality industry,

has been sold to well-known developer Aby Rosen. The new

owner's portfolio includes the Seagram Building and Lever House.

The sellers' (Walton Capital and Highgate Holdings) asking price

was $275 million. Obviously, the Paramount will face competition

from other large neighborhood hotels but Rosen hopes to restore

the landmark property to its 1980s glory days. The Paramount was

one of the first hotels opened by former nightclub impresarios Ian

Schrager and Steve Rubell.

47% of hotel executives consider that RevPAR is expecting to increase

of six to 10 percent in 2011 compared to 2010

27%

47%

22%

4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1%‐5% 6%‐10% 11%‐15% 16%‐20%

Sour

ce: H

VS,

ST

R G

loba

l and

N

atio

nal B

urea

u of

Eco

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esea

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http://www.related.com/

http://www.yotel.com/

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Paramount+Hotel,+West+46th+Street,+New+York,+NY,+United+States&aq=0&sll=37.0625,-95.677068&sspn=38.826758,79.013672&ie=UTF8&hq=Paramount+Hotel,+West+46th+Street,+New+York,+NY,+United+States&ll=40.






On June 6, LaSalle Hotel Properties confirmed that the company

had signed a Purchase and Sale Agreement to acquire the Park Central Hotel for $405.5 million. The acquisition of the 934-

room, urban full service hotel on Seventh Avenue in midtown

Manhattan will be subject to Lasalle's "due diligence" as well as

closing requirements and conditions. Yet if all goes to plan, the deal will close towards the end of the third quarter of 2011.

Winthrop Realty Trust has invested in the Sofitel Hotel. The company invested $5.76 million and received a 50% economic

interest in a $71.5 million mezzanine loan held by Concord Debt

Holdings secured by an interest in the hotel. The loan is

encumbered by a $56.2 million repurchase obligation.

Morgans Hotel Group Co has closed the sale of two Midtown

Manhattan hotels – Royalton and Morgans. The buyer was an

affiliate of FelCor Lodging Trust Inc. The proceeds of the sales

came to $140 million ($496,000 per room). Morgan Hotels will

continue to operate both hotels under a 15-year management

agreement. Richard A. Smith, President and CEO of FelCor, says

that this purchase is an example of REITs entering new markets.

52% of hotel executives are considering that RevPAR would

return to its pre-recession (2008) level between 2012 and 2013 So

urce

: HV

S, S

TR

Glo

bal a

nd

Nat

iona

l Bur

eau

of E

cono

mic

Res

earc

h

25%

52%

19%

4%

0%

10%

20%

30%

40%

50%

60%

2012 2013 2014 After 2014



http://www.lasallehotels.com/

http://www.parkcentralny.com/

http://www.winthropreit.com/default.html

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Sofitel+Hotel,+West+44th+Street,+New+York,+NY,+United+States&aq=0&sll=40.74034,-74.089364&sspn=0.255443,0.617294&ie=UTF8&hq=Sofitel+Hotel,+West+44th+Street,+New+York,+NY,+United+States&ll=40.75902

http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Sofitel+Hotel,+West+44th+Street,+New+York,+NY,+United+States&aq=0&sll=40.74034,-74.089364&sspn=0.255443,0.617294&ie=UTF8&hq=Sofitel+Hotel,+West+44th+Street,+New+York,+NY,+United+States&ll=40.75902

http://www.royaltonhotel.com/en-us/

http://www.morganshotel.com/en-us/#/home/

http://www.felcor.com/



Hotel Investment Convention NYC

The 33rd annual New York University International

Hospitality Industry Investment Conference took place In

New York City from June 5-June 7, 2011. Considered the

world's premier conference dedicated to the hospitality sector,

the convention was attended by over 600 participants

including industry leaders, entrepreneurs, investors, and

professionals from around the world.

The main message to come out of the conference was that the

time is right for hotel investment. Jonathan Gray, senior

managing director and co-head of real estate for The Blackstone

Group, suggested that this current period of recovery is perfect

timing for investment.

Barry Sternlicht, chairman and CEO of Starwood Capital Group,

admits to being concerned about the state of the global economy,

Yet Sternlicht emphasizes that he will still pursue hotel acquisitions.

Sternlicht lists New York as one of the "really great markets."

REIT executives at the conference said that their lack of leverage

(and sometimes, lower cost of capital) helped them develop

acquisition strategies. Executives suggested that these advantages

would last for the next couple of years.

"Being an investor … if you wait for the all-clear sign, it’s generally too late."

Says Gray



http://www.blackstone.com/




http://www.starwoodcapital.com/



Endless Opportunities

The opportunities for hotel buyers and sellers are never-ending in

the current NYC market. Tourism statistics, occupancy rates,

room rates – all three should continue to rise during the

remainder of spring and into summer. During April, average daily

NYC room rates increased to $236.41 from $217.19.

Between 2011 and 2013, HVS forecasts a definite rise in RevPAR

driven by increasing ADR. At present, one third of 'revenue per

available room' stems from increasing ADR and continued

growth is expected in the future. According to Mark Lomanno,

CEO of STR, ADR should rise above US$100 to US$102.21

during 2011. By the end of 2012, ADR should be above the

previous peak in 2008 of US$107.35.

The majority of the hotel executives are anticipating that Net Operating

Income (NOI) would recover and return to its prerecession level

between 2013 and 2014

Sour

ce: H

VS,

ST

R G

loba

l and

N

atio

nal B

urea

u of

Eco

nom

ic R

esea

rch

4%

14%

35%

27%

18%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2011 2012 2013 2014 After 2014




http://www.hvs.com/



Overall Recovery

The recovery in the hotel industry extends to all metrics. Since

last year, the hospitality sector is showing a record-breaking

number of room sales. Initial statistics from the Booking Channel

Analysis indicate that most of the demand and revenue for chain

hotels in 2010 originated from property-direct channels (54.3% -

demand, 46.5% - revenue). The total 52 markets covered by

HVS will experience room value increases. Steve Rushmore,

president and founder of HVS, says that the estimated increase

will be 28% in 2011 to US$84,000 per room.

Manhattan Leads

Savvy investors are focused on acquiring upscale hotels in gateway

cities across the country. Manhattan is the leader in U.S. hotel

transactions. Manhattan has year-to-date sales over $1 billion (a

quarter of the nation's high-quality urban hotel trade volumes).

After all, the region is known as the world's financial capital with

a diverse and extensive economic base.

The majority of international travel-ers originated from Europe, with

most of these visitors coming from the United Kingdom. Brazil and Canada followed in the ranking.

Sour

ce: H

VS,

ST

R G

loba

l and

N

atio

nal B

urea

u of

Eco

nom

ic R

esea

rch

19%4%8%11%

32%

73%

33%

82%

8%4%6%11%16%

37%

0%20%40%60%80%

100%

Asia/Pacific

China

India

Australia

Canada

Europe

Germ

any

UK

Middle Est

Carribean

Central …

Mexico

South America

Brazil





Conclusion

Manhattan Hotel Market The Manhattan hotel market is making a strong recovery. The

growth and development evident in spring 2011 will extend into

the summer and beyond. Investors need not be scared away by

the intense activity in the marketplace.

Hotel owners will face competition but the NYC market can

handle the influx of new hotels. Hotel profitability should not be

a concern for New York City owners. This city is not expected to

lose its appeal any time soon.

New York City is a magnet for leisure tourists and corporate

travelers including international guests. During 2010, European

travelers (as well as guests from Canada and Brazil) accounted for

35% of business. An increase in NYC tourism over the past six to

twelve months is driving economic growth in this key market.

Forecast of supply and demand – 2011 to 2013

Sour

ce: H

VS,

ST

R G

loba

l and

N

atio

nal B

urea

u of

Eco

nom

ic R

esea

rch

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

3,00%

3,50%

4,00%

2011 Est. 2012 Est. 2013 Est.

Supply

Demand






The city is expected to entertain at least 50 million guests by

2012. A rebound in tourism has an overall boom effect from

the number of hotel occupancies to the level of employment

in the hospitality industry. Indeed, a stronger tourism market

in Manhattan means a better outlook for tourism on the

national level.

New developments or major hotel renovations are bound to pay

off in the Manhattan marketplace. The NYC hotel sector will

remain a revitalized market in the near and distant future. Invest

in NYC hotels for short term and long term gains.





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