NEW YORK CITY-For a purchase price of $76.5 million--or approximately $414,000 per key--Chesapeake Lodging Trust has entered into an acquisition agreement for the soon-to-be completed 185-room Hyatt Place New York Midtown South. The deal will be set in stone when the hotel is finished which, according to Chesapeake, should take place in the third quarter of 2012.
Further, the REIT will provide the seller with $6.5 million in bridge financing to expedite construction of the hotel. The Hyatt will eventually be co-managed by Chesapeake and Real Hospitality Group, a company which currently operates the REIT’s other hotel in Midtown on 31st Street.
The new hotel will stand at 25 stories and is designed for both business and leisure travelers. It contains 27 rooms with double beds and 158 king-bed rooms and all will possess central HVAC systems.
Of the new agreement, James L. Francis, Chesapeake's president and chief executive officer was quoted as saying, "Similar to the Holiday Inn New York City Midtown--31st Street, which we acquired in late December 2011 and opened on January 19th, we expect the Hyatt Place to ramp-up very quickly given the robust demand in Manhattan, the strength of the Hyatt brand, and our operator’s extensive experience managing hotels in New York City."
He went on to say that "following this acquisition, approximately 8% of [Chesapeake’s] portfolio’s hotel rooms will be based in Midtown Manhattan."
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