Behind the LaGuardia Marriott Buy
We dont normally think of hotels in NYC trading at steep discounts. But thats what happened when Rubicon Cos picked up the 438-key LaGuardia Marriott for $22M two-thirds less than the $69M it sold for in 2007. Savills' Tom Baker (with colleagues Marc Magazine, Dave Durbin, and Justin Magazine) told us yesterday that the age and condition of the properties around LGA and JFK drive down ADR, RevPAR, and profit margins helped to lower the price. New supply, though, would force older product to renovate or go away. The demand's there, he says, so Tom and his colleagues think Rubicon made a good buy.
LaSalle Hotel Properties, repped by Sonnenblick Goldman, sold the property to RLJ five years ago. RLJ lost the property to the lender in '11, and Cushman & Wakefield, which had since absorbed Sonnenblick, again repped the sellers: this time Capmark and Allied Irish Banks. Ackman Ziff's Mark Owens, who worked for Sonnenblick on the deal five years ago, tells us airport submarkets can be more volatile than the average hotel market, subject to weather and consumer spending. (As long as they don't have to get the TSA "pat down," they'll survive.)