Host Hotels & Resorts Closes US$302 Million Sale of the Westin New York Grand Central Hotel

Main Photo:  Westin New York Grand Central Hotel

Date: January 2019

Location: New York, USA

Name: Westin New York Grand Central Hotel

No. of Keys: 774

Seller: Host Hotels & Resorts, Inc., the nation’s largest lodging real estate investment trust, today announced that it closed on the previously announced agreement to sell the Westin New York Grand Central hotel for US$302 million, including approximately $20 million of FF&E funds.

“We have been pleased with our continued execution of further reducing our exposure to New York, a key initiative set early on in my tenure as CEO.

With the completion of this sale, we have sold 3 assets and the retail, signage, and theatre condo space at the New York Marriott Marquis for $1.1 billion at very attractive pricing.

In 2018, Host sold two other Manhattan hotels: the 697-room W hotel at 541 Lexington Ave., which was purchased for $190 million by a venture of Capstone Equities and Highgate Holdings that has re-named it the Maxwell, and the 270-room W New York Union Square that Westbrook Partners purchased for $171 million. Host had acquired that property, at 201 Park Ave. South, in 2010 for $185.3 million.

We continue to strengthen our investment grade balance sheet and enhance our ability to make strategic investments that ultimately drive long-term value creation for our stockholders whether it is investing in our portfolio, acquiring assets, or buying back our stock,” said James F. Risoleo, President and Chief Executive Officer.

Host had purchased the property, formerly known as the New York Helmsley, in 2011 for $313.5 million. It re-branded the property, at 212 East 42nd St., as a Westin in 2012 and invested $65 million on a renovation to its rooms, lobby and bar/restaurant area. It also upgraded more than 15,000 square feet of meeting space.

Host Hotels & Resorts, Inc. is an S&P 500 company and is one of the largest owners of luxury and upper-upscale hotels.

They currently own 87 properties in the United States and five properties internationally totalling approximately 51,300 rooms.

The Company also holds non-controlling interests in three domestic (US) joint ventures.

Host was created in 1993 as a spin-off from Marriott, taking on the real estate, without the management.

Buyer: Davidson Kempner Capital Management.

Goldman Sachs provided Davidson Kempner with $197 million in short-term, floating-rate debt to acquire the property at 212 East 42nd Street between Second and Third avenues and fund its renovation.

Representatives for Davidson Kempner and Goldman Sachs could not be immediately reached for comment.

JLL’s Jeffrey Davis negotiated the sale on behalf of Host Hotels, and his JLL colleague Kevin Davis secured financing on behalf for the new owner.

Davidson Kempner Capital Management LP is a global institutional investment management firm with approximately $30.9 billion in assets under management as of January 31, 2018.

The firm was founded in May 1983 by Marvin H. Davidson and is led by Thomas L. Kempner, Jr. and Anthony A. Yoseloff, who are Co-Executive Managing Members at the firm.

Davidson Kempner is headquartered in New York City, with additional offices in London, Dublin and Hong Kong.

As of June 30, 2017, Davidson Kempner was ranked as the 13th largest hedge fund in the world.

This is Davidson Kempner’s first purchase of a major hotel in the United States.

Price: US$302m

Price per Key: US$387,597

THPT Comment: Interesting move for this huge hedge fund, moving into it’s first hotel buy in the USA. Host bought the hotel for more than it sold, seven years later…

First Seen: Hotel Online

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