Insignia/ESG is handling the Gorham sale, which went into high-gear marketing mode earlier this week. The 115-room boutique property's unnamed owners have been working out legal kinks for the last six months while Insignia has been quietly talking to potential buyers. Now it's full steam ahead.
"We just got the green light as of Monday and we're aggressively marketing it as of right now," Insignia senior managing director Paul Fitzpatrick tells GlobeSt.com. "There's been a tremendous amount of interest. Over the last six months we've probably talked with 30 to 35 potential buyers. We just had some legal and title issues with the ownership."
When asked to confirm the asking price, Fitzpatrick called the $25 million to $30 million window "a good range," adding that the seller "doesn't have a firm number" in mind. He would not identify the current owner, referring only to "private individuals."
Aside from its prime location on 55th St. between Sixth and Seventh avenues, Fitzpatrick says the "bite-size" hotel is notable for its "high percentage of oversized guest rooms." Of the 115 rooms, 42 are junior suites.
But a local industry expert tells GlobeSt.com that the property could fetch the low end of the asking price at best. "That hotel doesn't trade at $260,000 a key," the source says.
And Sonnenblick-Goldman managing director Mark Gordon, while bullish on the market, calls the Gorham "a three-star hotel in a four-star location." He would not comment on the property's value.
Industry sources tell GlobeSt.com that Gordon has his hands full with the marketing assignment for another local hotel, Credit Suisse First Boston's 375-room Empire. The Lincoln Center-area property is located at 44 W. 63rd St. The deal is not expected to close before the end of the year and no asking price has been revealed.
Rumblings that Sonnenblick has been hired to dispose of a landmark Manhattan hotel have been going on for several weeks, and Gordon, while confirming that "we were just retained to sell another new York flagship hotel," has steadfastly refused to name it.
"The New York hotel investor market is extremely strong," Gordon tells GlobeSt.com. "We were able to generate 12 offers for the Hotel Delmonico 30 days after Sept. 11." Donald Trump bought the property for $115 million.
But other industry experts say that not only have there been too few recent hotel transactions to accurately gauge the market, recent indicators suggest that buyers and sellers have some compromising to do before hotel properties start actively trading again.
"Sellers have to be a little more realistic [in their pricing] and buyers have to be looking forward [to a more favorable economy]," says Arthur Adler, managing director and CEO for the Americas for Jones Lang LaSalle hotels. "There have been some hotels on the market that haven't traded because investors haven't been willing to pay what sellers are asking," he tells GlobeSt.com.
"That doesn't mean that there's not a lot of people looking," Adler notes, adding that he has great confidence in New York's lodging sector. "But cash flows in 2002 are much lower than in 2000, so anybody buying is going to have to look at the future, at where the market's going as opposed to where it's been the last year and a half."
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