W at Union Square Sale Affirms Demand for Luxury Lodging
Real Estate Finance & Investment reports: Relying on Real Capital Analytics’ (RCA) data and analysis in the hotel sector, Real Estate Finance & Investment (REFI) stated that the recent sale of the financially ailing W Hotel at Union Square “is being taken as a pointer to significant liquidity in the New York hotel market for luxury products with strong name recognition.” With few trophy, top-shelf hotel sales occurring even during a prosperous economic period, when these properties come to market, they are often good indicators of investor demand for other potential sales and the health of the market overall.
On such hotel that generated a wave of investor interest was the W Hotel at Union Square, which, according to RCA, Host Hotels & Resorts recently purchased for $185.2 million. RCA managing director Dan Fasulo pointed out that, although it was the largest single hotel transaction this year, the luxury property actually traded for about $100 million less than its previous sale in 2006. “At that time, it traded for $1 million per key, so it has lost significant value from the height of the market. But this is arguably an irreplaceable asset and it’s the type that is very much in demand by investors now,” stated Mr. Fasulo.
As another recent indicator of the current demand for well-located luxury lodging, REFI referenced the Helmsley Carlton House in Manhattan - a deal that closed in March for $1 million per-unit, according to RCA.
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Posted by: Nina Turner