We don't normally think of hotels in NYC trading at steep discounts. But Rubicon Cos picked up the 438-key LaGuardia Marriott for two-thirds less than it sold in 2007. Blame its fellow airport hotels, now outdated, and an overpriced management contract.
Savills'
Tom Baker (with colleagues
Marc Magazine,
Dave Durbin, and
Justin Magazine) told us
yesterday the age and condition of the properties around LGA and JFK drives down ADR, RevPAR, and profit margins. New supply, though, would
force older product to renovate or ship out. The demand is there, he says, so Tom and his colleagues think Rubicon made a
good buy at a reported
$22M. "Assuming they can get the operations turned around, there should be good upside there," he says. LW Hospitality CEO
Dan Lesser adds that the hotel has lots of years left on its Marriott
management contract, which is priced well
above market value.
LaSalle Hotel Properties, repped by Sonnenblick Goldman, sold the property to RLJ five years ago for
$69M; RLJ lost the property to lenders
Capmark and
Allied Irish banks in '11. Cushman & Wakefield, which since absorbed Sonnenblick, repped the sellers again this time. Ackman-Ziff's
Mark Owens (above) worked for Sonnenblick on the deal in '07 and tells us airport submarkets can be more
volatile because they're subject to factors like weather and consumer spending. Yet with 15k SF of meeting space, the LaGuardia Marriott is popular for quick
face-to-face meetings and benefits from JFK proximity.
Downtown is so
diversified that financial services now only makes up
28% of its jobs, while tech, media, professional, and creative service tenants are growing, according to Downtown Alliance president
Liz Berger (with Brookfield Office Properties CEO of US operations
Mitch Rudin, host at One World Financial Center) of last week?s
Bisnow Future of Downtown event. Add a huge boost in
tourism and a population that has jumped from 10,000 in 1982, when Liz moved Downtown, to
60,000 today.
Before 9/11, some of the
best-performing stores in the country were located Downtown, says RKF EVP
Karen Bellantoni, snapped here with Brookfield national director of retail leasing
Ed Hogan and Madison Capital founder
Richard Wagman. Fast forward, and retailers are asking ?Where do we go after SoHo?? Answer: Lower Manhattan again, in
multiple locations. Richard says Madison Capital?s portfolio is a
direct beneficiary, particularly from retailers wanting to be close to
Century 21. He adds his firm would invest an additional
$250M to $500M in mixed-use Downtown. How?s that for bullish?
The key: finding the
right mix of retail to serve workers, residents, and tourists and
keep them in Lower Manhattan, says Westfield World Trade Center exec director of leasing
David Ruddick (right, with moderator and soon-to-be Downtown resident
Glenn Brill of FTI Consulting). ?It has to be
relevant by day and night,? he says. Brookfield, in turn, is doing a
$250M revamp of the nearly three-decade-old World Financial Center?s retail portion (renamed
Brookfield Place), which Ed says will create a
better shopping corridor and give retailers the critical mass and right sightlines they need.
Battery Park City was once considered a
B location, but now it?s
A-plus, says The Albanese Organization prez
Christopher Albanese, left, whose Downtown residential assets include
The Visionaire,
The Solaire, and
The Verdesian?some of its apartments are even commanding rents similar to the Upper East and West Sides. He has two more projects in the works: a 50-story tower south of the WTC and a 65-story tower at
50 West St with
Time Equities. For investors, Downtown is still affordable at
$1,000/SF versus $1,300/SF for the rest of Manhattan, adds Massey Knakal partner
James Nelson, right.
LW Hospitality Advisors prez
Dan Lesser also updated us on the vibrant hospitality market, fresh off of its record
52 million visitor year. Demand continues to be strong, he says, and the supply influx of new rooms has been absorbed. That has resulted in occupancy rates in the
mid-'80s, giving hoteliers
strong pricing power. Want to hear more? Join Dan at
Bisnow?s third annual
NY Hotel Investment Summit on Feb. 13 at The Roosevelt. (Sign up
here.) And it?s your last chance to sign up for our second annual
NY Healthcare Summit on Jan. 29, also at The Roosevelt (
Register.)
Bisnow?s NY biz dev head Miles Bloom is picking Colin Kaepernick's Niners to beat the streaky Joe Flacco's Ravens by a TD on Feb. 3, but then, he says, his support of any NFL franchise may be a kiss of death (once his Bills bombed, he joined the Broncos bandwagon). Unlike many of us, though, Miles is ready for life after football. He'll be rooting on Tiger at Augusta, boxer Floyd Mayweather and his perfect record, the NHL's Sabres, MLB's Yankees, and NBA Thunder. Miles and the rest of our sales team have announced a limited-time promo for advertising in our e-news pubs. Bisnow's Hit the Ground Running promotion (that means good prices) is by far the best way to reach our 523,000 subscribers across North America, and especially our loyal NYC readers. Email Miles at miles.bloom@bisnow.com to chat about pricing (or why he's wrong about the Super Bowl) while the offer lasts.
30 years ago today, The A-Team made its television debut. We pity the fool who doesn't send story ideas to amanda.metcalf@bisnow.com.
