Host Hotels pays $233.8M to Starwood for hotel in Midtown West

Host Hotels & Resorts through the entity 1414 Cpny LLC paid $233.8 million to Starwood Capital Group through the entity 1414 Holdings, L.L.C. for the 1 Hotel Central Park building (H1) at 1414 Avenue of the Americas in Midtown West, Manhattan, at the corner of West 58th Street, one block south of Central Park.
The deal closed on July 12, 2024 and was recorded on July 16, 2024. The property has 109,908 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $2,126 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 signatory for Starwood Capital Group was Jeremy Tobin. The signatory for Host Hotels & Resorts was Nathan S. Tyrrell. The contract date was June 14, 2024. Bisnow reported on the sale of 1 Hotel Central Park yesterday, noting the price was more than $1 million per room.

Starwood bought the building in 2011 for $72 million.

Host Hotels & Resorts is a REIT and describes itself as, “the largest third-party owner of Marriott and Hyatt hotels.” The Florida-based SH Group, which operates the 1 Hotels brand, will continue as operator through a new 25-year contract with two 5-year options.

Host Hotels & Resorts financed the purchase with a $150 million loan from the entity TRS NY Lender LLC, which is affiliated with Host Hotels, and Nathan S. Tyrrell, Host Hotels chief investment officer, signed for both the lender and the borrower entities.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Host Hotels & Resorts had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Starwood Capital Group had not purchased any other properties and sold one property in one transaction for a total of $4 million over the same time period.

The property

The hotel building in Midtown West has 109,908 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 75 feet and is 95 feet deep with a total lot size of 7,164 square feet. The zoning is C5-1 which allows for up to 4 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 $78.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received two DOB violations and $4,035 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on July 31, 2015. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 3rd highest sale turnover among other neighborhoods in the city with $2.6 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 27.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 37 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of nine of the 17 commercial properties representing 2,307,380 square feet of the 2,531,170 square feet. The largest owner is Vornado Realty Trust, followed by Solow Realty & Development.
On the tax block, there was one new building construction project filed totaling 36,423 square feet. It is a 15-unit, 36,423 square-foot residential (R-2) building submitted by Solow Realty & Development and filed by Anthony Calicchio with plans filed December 30, 2016 and permitted January 24, 2018.

The majority, or 80 percent of the 2.5 million square feet of built space are office buildings, with hotel buildings next occupying 9 percent of the space.

The seller

The PincusCo database currently indicates that Starwood Capital Group owned at least four commercial properties in New York City with 352,035 square feet and a city-determined market value of $101.3 million. (Market value is typically about 50% of actual value.) The portfolio has $189.9 million in debt, with top three lenders as Barclays, Centennial Bank, and JPMorgan Chase respectively. Within the portfolio, the bulk, or 57 percent of the 352,035 square feet of built space are hotel properties, with specialty properties next occupying 42 percent of the space. The bulk, or 43 percent of the built space, is in Brooklyn, with Bronx next at 42 percent of the space.

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