NEW YORK CITY-Marking its first New York City transaction, Annapolis, MD-based lodging REIT Chesapeake Lodging Trust closed on its acquisition of a 122-room Holiday Inn at 30-32 W. 31st St. in Midtown for $52.2 million, the company said Friday morning. The hotel, funded through the trust’s revolving credit facility, will be managed by Ocean City, MD-based Real Hospitality Group.
“We are excited to acquire our first hotel in the New York City market at a very compelling entry point,” says James L. Francis, president and CEO at Chesapeake Lodging Trust, in a statement following the deal. In total, the REIT now owns 12 hotels with an aggregate of 3,512 rooms in six states and the DC-metro market.
The newly-constructed, 18-story hotel, located on West 31st Street between 5th Avenue and Broadway, is situated in Midtown’s Herald Square submarket near retailers such as Macy’s, Victoria’s Secret, Daffy’s and several others. The hotel is also in close proximity to Penn Station and six major subway lines. It features 94 king rooms, 20 double-bedded rooms, six ADA-accessible rooms, two suites, a rooftop bar and Contorno’s Restaurant, an 80-seat upscale Italian restaurant on the ground floor. The property traded around $428,000 per key.
The deal comes at a time when Manhattan hotels are experiencing a steady revival. According to NYC & Co., the city’s official tourism arm, the city will reach a record 90,000 hotel rooms by year’s end, a 24% increase since 2006, GlobeSt.com reported. By early 2012, more than 7,000 rooms are in the pipeline.
"Given the robust demand in midtown Manhattan, our operator’s experience managing hotels in New York City, and the strength of the IHG reservation system, we expect the Holiday Inn New York City Midtown – 31st Street to ramp-up very quickly," Francis says.
According to the REIT’s company filings, its portfolio saw an increase in RevPAR in the third quarter, resulting in stabilizing occupancy levels to more 80% as of November 2011. In Q4, it has declared a dividend payment of 20-cents per common share.
Chesapeake Lodging Trust did not return a phone call to GlobeSt.com for this story.
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