Mack Real Estate Acquires 7 NYC Hotels

By Dev Anand | 14 March 2021

Main Photo: The Candlewood Suites NYC

Date: March 2021

Locations: Central New York

Names: The properties are under the Holiday Inn, Hampton Inn and Candlewood Suites brands.

No. Keys: 1,087

Seller: A joint venture between Hersha Hospitality Trust and Chinese investment firm Cindat Capital Management until 2016, when the Philadelphia-based REIT sold a 70 percent majority interest to Cindat in a deal worth $571.4 million.

Buyer: At auction, Manhattan-based Mack Real Estate has acquired a portfolio of seven hotels with 1,087 rooms in New York City. The properties are under the Holiday Inn, Hampton Inn and Candlewood Suites brands, and had been fully owned by a joint venture between Hersha Hospitality Trust and Chinese investment firm Cindat Capital Management until 2016, when the Philadelphia-based REIT sold a 70 percent majority interest to Cindat in a deal worth $571.4 million, or $526,000 per key,

According to real estate site The Real Deal, the acquisition appears to be a major discount for the buyer. Mack paid transfer taxes on $315.8 million—or less than 40 percent of the portfolio’s 2016 value of $816.3 million—for the seven assets.

Earlier this year, Mack initiated UCC foreclosure proceedings against the former owners, who reportedly defaulted on an $85 million mezzanine loan issued in 2018 by Mack Real Estate Credit Strategies.

The portfolio was put up for auction on Jan. 21, and according to a transfer tax document filed with the city, Mack was the highest bidder.

The hotels are:

Holiday Inn Express Times Square, 210 rooms
Candlewood Suites Times Square, 188 rooms
Hampton Inn Times Square, 184 rooms
Hampton Inn Chelsea, 144 rooms
Hampton Inn Herald Square, 136 rooms
Holiday Inn Wall Street, 113 rooms
Holiday Inn Express Wall Street, 112 rooms

Price: US$315.8m

Price per Key: $290,524

THPT Comment: Sale by auction is not really known in Europe, but is quite common in the USA, South Africa and other countries. The price/drop in value shows the “Covid Discount” in action in NYC.

First Seen: Hotel Management

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Posted in Recent Deals