Vornado had previously accounted for its leasehold interest in the property as a capital lease. This means treating an interest as an owned asset. Often companies will treat an asset as a capital lease when it has the option to buy the asset at a specified price that can be below market. An asset treated as a capital lease is also subject to annual depreciation.

Vornado notes its basis in the property totals $663 million. This represents how much money they paid for the initial 54% interest and their recently acquired 46% stake, inclusive of all capital previously invested and approximately $17 million of tenant improvements to be paid through 2019. The buyer projects that the property will generate an 8.5% stabilized cash net operating income yield on its $663 million investment beginning in Q1 2019.

On Sept. 6, 2018, Host also closed on the sale of the W New York, Union Square. Real Capital Analytics recorded that Westbrook Partners purchased the 20-story structure, built in 1911, from a joint venture of Host Hotels & Resorts and Istithmar World, a financial services company based in Dubai, United Arab Emirates, for $165.6 million.

Host states the Marriott Marquis and W New York transactions demonstrate their ability to monetize their portfolio of investment opportunities at very attractive pricing. “Based on 2018 forecasts, the sale price for these transactions represent a 26x EBITDA (earnings before interest, tax, depreciation and amortization) multiple,” says James F. Risoleo, Host's president and CEO. “The proceeds continue to strengthen our investment grade balance sheet and enhance our ability to make strategic investments that ultimately drive long-term value creation for our stockholders.”