New York City Flourishing Hotel market 1st Quarter Manhattan Hotel Market Report 2011

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Within the NYC hotel market, the first quarter of 2011 has been filled with endless activity and countless transactions. Indeed, New York City ranked as the top global city for foreign real estate investment for 2011. New York had made third place in the rankings during 2010.

The New Year started out on a promising note with the purchase of the Doubletree Metropolitan by U.S. billionaire Robert L. Johnson. RJ Development, controlled by Johnson, founder of the Black Entertainment Television network, paid $335 million for this Midtown hotel with its splendid architecture. Since 2008, Johnson’s company has bought three Manhattan hotels. Johnson purchased the Hilton Garden Inn at 63 W. 35^th St. and the Fashion 26 Hotel at 152 W. 26th St. for more than $100 million each. RLJ Development President, Thomas J. Baltimore Jr., explained that the purchases fit the company’s investment plan to buy high-caliber real estate. 

The Maryland-based DiamondRock Hospitality Company has been delving big-time into NYC developments during the first months of 2011. In January, industry reports confirmed that the company was planning to purchase a hotel property under development on West 42nd Street in Times Square. Depending on the number of guest rooms (probable 250 to 300 guest rooms, $450,000 each), the contractual price was to range between $112.5 million and $135 million. In addition, on March 14, DiamondRock Hospitality Group announced that it had the right of first refusal to buy the adjacent Knickerbocker Hotel. 

The estate of Leona Helmsley sold the New York Helmsley to Host Hotels and Resorts Inc. for $313.5 million. The buyer is a S&P 500 and Fortune 500 company, the largest lodging real estate investment trust, and one of the largest owners of luxury and upper upscale hotels. Host Hotels and Resorts owns 104 properties (62,000 rooms) in the US and nine international assets. Starwood Hotels and Resorts Worldwide, Inc. will take over the management of this Midtown Manhattan hotel. Host Hotels allocated $50 million for renovations. This luxury hotel, however, is still a good deal considering its prime location and popularity with guests. 

Barry Sternlicht's Starwood Capital bought 1414 Ave. of Americas for $72 million and planned to turn it to a hotel (its original purpose). Earlier, Ian Schrager and Norman Sturner of Murray Hill Properties wanted to create a hotel at the site on the southeast of W. 58th Street by Central Park. In November 2007, Murray Hill bought the building for $120.5