Mitchell Hochberg, president, of the Lightstone Group.
NEW YORK CITY – The Lightstone Group, a real estate investment management firm, is betting on affordable hotel investments in New York City. The firm opened a chain of Moxy Hotels catering to that sliver of the market and will soon launch two more, the Moxy Lower East Side and Moxy Williamsburg. The investments as viewed as not only lucrative but recession-proof in the case of a market slow down, Mitchell Hochberg, president of the Lightstone Group, tells Globest.com.
Lightstone embarked on building affordable hotels three to four years ago in a partnership with Marriott International to develop the first three properties bearing the Moxy brand, which included the Moxy Times Square that has over 600 rooms and Moxy Chelsea with over 340 rooms, and then most recently the Moxy East Village that has an estimated 290 rooms.
The hotel concept was Lightstone's way of separating itself from the pack in the hotel sector, and from a basis perspective, underwriting pricing for the asset type and growth overtime were too attractive not to turn the Moxy brand into a hotel chain, according to Hochberg.
Creative and proven concepts to appeal to the market over time is a must for investment yields because pricing for assets and land does not reflect slowing market fundamentals. Overall, transaction volume is down from 2018 in not only hotels but across various sectors. These factors are all considered when Lightstone is underwriting deals, focusing on the basis for risk and returns, according to Hochberg.
"In terms of current opportunities, more than ever, we're focused on the basis," he said. "I think it's critical to buy or develop at a basis that reflects the current market."
Moxy hotel room rates go as low as $140 a night. Amenities include trendy rooftop bars and restaurants. The community has widely accepted the appeal to the affordability of the hotel and its offerings, filling out the amenity spaces not only as overnight guests but as regulars at the establishment, according to Hochberg.
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Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
