Holiday Inn Club pays $30.3M to Timeshare Acquisitions for portion of hotel in Midtown East

The timeshare company Holiday Inn Club Vacations through the entity 501 Lexington Development Company, LLC paid $30.3 million to Timeshare Acquisitions through the entity Timeshare Acquisitions At Lexington, LLC for approximately 28 percent of the hotel building (H3) at 501 Lexington Avenue in Midtown East, Manhattan.
The deal closed on January 24, 2024 and was recorded on January 29, 2024. The property has 92,501 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $327 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The seller bought the property on February 8, 2022, for $41.4 million. The signatory for Timeshare Acquisitions was Bert Blicher. The signatory for Holiday Inn Club Vacations was Michael J. Thompson. The contract date was February 8, 2022.

On February 8, 2022, Bert Blicher of Timeshare Acquisition bought the former Roger Smith Hotel for $41.4 million. On the same day, February 8, 2022, Timeshare Acquisition signed a contract to sell nine commercial units with a total of about 5 percent of the total space and 21 vacation units with a total of about 23 percent of the building to Holiday Inn Club Vacations. In order to complete that transaction, this month Bert Blicher of Timeshare Acquisitions created a Vacation Ownership Plan for the building, dividing it into 81 vacation units and the nine commercial units. The project has 13 studio units, 53 one-bedroom, 14 two-bedroom and 1 three-bedroom units.

In this $30.3 million deed transaction, Timeshare Acquisitions is completing the planned sale of these units to Holiday Inn Club Vacations. Simultaneously with the sale, Timeshare Acquisition as landlord signed a lease with Holiday Inn Club Vacations. David S. Pontius signed for the Timeshare Acquisitions entity in the Vacation plan filing.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Holiday Inn Club Vacations purchased two properties in one transactions for a total of $8.5 million and has no record it sold any properties over the past 24 months.
The seller Timeshare Acquisitions purchased one properties in one transactions for a total of $41.4 million and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes James Knowles, head officer and Craig Russell, agent. The business entity is Unit No 3 Corp.

The property

The hotel building in Midtown East has 92,501 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 6,050 square feet. The lot is irregular. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $19.1 million. The most recent loan totaled $42 million and was provided by Western Alliance Bank on November 15, 2022.

Development

On the lot, there is one active major alteration construction project for an 84-unit building. The project was submitted by Timeshare Acquisitions with plans filed November 16, 2023 and it has not been permitted yet.

The neighborhood

In Midtown East, The majority, or 81 percent of the 62.6 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.8 billion in sales volume in the last two years. For development, Midtown East is the 2nd most active neighborhood among other neighborhoods. It had 15.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of seven of the 12 commercial properties representing 992,985 square feet of the 1,053,867 square feet. The largest owner is Timeshare Acquisitions, followed by New Empire Corp. and then Madison Realty Capital.
On the tax block, there was one new building construction project filed totaling 151,836 square feet. It is a 137-unit, 151,836 square-foot residential (R-2) building submitted by New Empire Corp. and filed by Bentley Zhao with plans filed March 28, 2016 and permitted August 12, 2021.

The majority, or 54 percent of the 1.1 million square feet of built space are hotel buildings, with elevator buildings next occupying 44 percent of the space.

The seller

The PincusCo database currently indicates that Timeshare Acquisitions owned at least one commercial property in New York City with 92,501 square feet and a city-determined market value of $19.1 million. (Market value is typically about 50% of actual value.) The portfolio has $76 million in debt, borrowed from Western Alliance Bank. The portfolio consists of at least a single hotel property. It is located in Manhattan.

The buyer

The PincusCo database currently indicates that Holiday Inn Club Vacations owned at least two commercial properties with five residential units in New York City with 7,677 square feet and a city-determined market value of $5.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are mixed-use properties. They are all located in Manhattan.

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