Main Photo: The terrace of the penthouse suite at the Times Square Edition
Date: May 2020
Location: Times Square, New York, NY, USA
Name: The Times Square Edition
No. of Keys: 452
Owner: The Times Square Edition, a Manhattan hotel that opened to great fanfare last year, is slated to close permanently in August as the coronavirus grinds tourism to a halt and the hotel’s owner faces off with lenders.
A representative for Marriott International Inc., which operates the Edition brand, says it “has provided advance notice to employees, government officials and union officials” that it expects to cease operations of the property on or about Aug. 13, 2020.
Marriott warned owner Maefield Development in March that a cash shortfall due to the outbreak could put the developer in default on its contract with the lodging giant, new documents in an ongoing foreclosure proceeding show. The hotel is part of a mixed-use property once appraised at $2.4 billion, according to a 2018 report from Moody’s Investors Service. Representatives for Maefield didn’t respond to requests for comment.
The company is the latest Midtown hotel investor to run into trouble. Earlier this month, the owner of the Hilton Times Square wrote down the value of the hotel to less than the $77 million mortgage on the property, warning investors that it may surrender the keys to its lender.
Payments were late on about $1 billion in commercial mortgage-backed securities used to finance New York hotels in April, while lodging executives are predicting that the pandemic, combined with an oversupply of rooms, will make it hard for the city’s market to recover.
“We expect to see many hotels and rooms fail to reopen, with perhaps many of them likely converted to affordable housing or homeless facilities,” Jon Bortz, chief executive officer of Pebblebrook Hotel Trust, said on a call with analysts earlier this month.
Still, new hotels are supposed to have advantages over competitors in a crowded market, and the Edition had major firepower behind it. The brand is a collaboration between Marriott, the world’s largest lodging company, and industry icon Ian Schrager, who co-founded the infamous nightclub Studio 54 before pioneering the concept of the boutique hotel. Opening night festivities attracted a generation-spanning list of luminaries, including Kendall Jenner and Diana Ross.
Maefield ran into challenges at the property before the pandemic brought the curtains down on Broadway and emptied Times Square of tourists. In December, a group of lenders led by Natixis SA sought to foreclose on the project, which includes the 452-room hotel, retail space and digital signage. A representative for Natixis declined to comment.
THPT Comment: Buyer – we are sure they will be many that would like to get their hands on this great asset…but do they have the wherewithal to do so?
First Seen: Bloomberg
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