NEW YORK CITY-The Knickerbocker Hotel is about to enjoy a facelift, in the wake of its sale to the newly-formed joint venture between FelCor and Highgate Foldings, according to FelCor vice president of strategic planning and relations, Steven Shafer. Fortunately, the exterior will remain unchanged.
"The interior has been completely gutted--it's ready for immediate development," he tells GlobeSt.com. "[The Knickerbocker] will effectively be brand new inside but it has unique architecture and a name that's been identified by NYC residents and travelers for over 100 years."
And what a deal this JV landed for such a name and address. The hotel was sold for $115 million which reflected a 30% discount per square foot, when compared to other recent transactions. "We feel we have a really great price for this," says Shafer. "We're looking at roughly $700,000 per key. Similar projects in NYC over the past couple of years were $850,000 to $900,000 per key."
FelCor notes that it owns 95% of the JV. When the hotel property reopens towards the close of 2013, Highgate will be responsible for management.
After all renovations have been completed, the building will contain 330 large guest rooms and feature a large rooftop sky bar and lounge. This space will present direct views of Times Square."This is a great opportunity for us," adds Shafer. "It fits our strategy to improve our portfolio quality, growth rates and enter core markets in which we are underrepresented."
According to the company, Felcor has completed more than $300 million of high-rise, ground-up development projects, including three upscale, high-rise condominium buildings containing over 600 units. Adding the Knickerbocker to its roster means FelCor will own three properties in the city.
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