Hotels For Sale in NYC - OFF MARKET Hotel Properties For Sale in New York - Hotel Development NYC

The Pennsylvania-based fourth-generation Korman family is planning an extended stay in New York City. This established company has built thousands of homes, apartment buildings, and commercial properties. The Kormans grew up in a Fort Washington home designed by Louis Kahn - renowned architect of the 20th century.

Major Influence

The family has been influenced by acclaimed architects. In their own right, the Kormans are making an impact on modern architects. Presently, the real estate family is doing a $100 million upgrade on four of their AKA extended-stay

brand hotels in Manhattan. The Kormans acquired these hotels between 2004 and 2007.

The AKA extended-stay brand provides unique accommodations. These Korman properties are upscale NYC hotels suited for long-term residence. The average guest stays from over three weeks to three months. Kormans ensure that they continue to experience comfort, style, and class during their stay.

Extended Style

Kormans extended-stay hotel accommodation offers subtle style - not the 'hip' atmosphere of boutique hotels. This brand does not resemble the Four Season hotels or Ian Schrager properties. Indeed, Larry Korman, partner at AKA, insists that his company is going for a completely different design than other hotels. When planning a redesign, however, Korman ensures that the plan works for the surrounding neighborhood.

AKA Sutton Place

The 76-suite AKA Sutton Place might appeal to mature guests. Its lobby features oak paneling. In fact, Korman hired Meyer Davis Studio to change the former Il Valentino restaurant into an oak-panel-accented cafe and lounge. The pink-tiled pool was repainted in a spa-like desert color. Pre-War Sutton Place has a classic and luxurious look with a fresh appeal.

AKA Central Park

Located on 58th Street, AKA Central Park, a 134-suite hotel, has a more modern décor suited to the young business person. Its redesign was overseen by HLW International in collaboration with Studio IntraMuros, AvroKO, Steven Learner, and Nicholas Cardone. The guest-only bar feels like a contemporary cigar lounge with two gas fireplaces as well as mustard and brown asymmetric furniture by Ligne Roset. A-list celebrities prefer AKA Central Park to pubic bars and clubs.

LED lights in primary colors are used to accent specific walls. On the penthouse floor, the lights between the doors can be changed to suit a guest's whim. The lobby has video artwork (depicting jellyfish ballooning and deflating) designed by Mr. Korman. The gym features a Monika Bravo six-panel video installation depicting reflections on water and creating the illusion of natural light. Patinaed stainless steel is a standard finish in this cool hotel.

AKA Times Square

In cooperation with architect Pieo Lissoni, Mr. Korman is building a two-story sky lounge on the penthouse level across from the site of the dropping of the New Year's Eve ball.

Extended Stay Brand

Since Manhattan is a strong market, all hotel categories can thrive in this area including extended-stay hotel brands. Of course, people must expect hotel rates in accordance with their expanded services and spacious accommodations.

AKA's Neighborly Upgrade

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Successful companies have to make the right decision. They must take the most profitable direction – whether that means buying, selling, or holding property. Recently, there is much discussion about if REITs are overpaying for real estate. According to reports from the latest NYU Hospitality Conference (June 5-June 7, 2011), private equity is pursuing different deals than REITs.

Private Equity

Historically, REITs focus on more stable properties. Of course, private equity can take risks and buy properties in need of repositioning.

Successful companies have to make the right decision. They must take the most profitable direction – whether that means buying, selling, or holding property. Recently, there is much discussion about if REITs are overpaying for real estate. According to reports from the latest NYU Hospitality Conference (June 5-June 7, 2011), private equity is pursuing different deals than REITs.

Private Equity

Historically, REITs focus on more stable properties. Of course, private equity can take risks and buy properties in need of repositioning.

Successful companies have to make the right decision. They must take the most profitable direction – whether that means buying, selling, or holding property. Recently, there is much discussion about if REITs are overpaying for real estate. According to reports from the latest NYU Hospitality Conference (June 5-June 7, 2011), private equity is pursuing different deals than REITs.

Private Equity

Historically, REITs focus on more stable properties. Of course, private equity can take risks and buy properties in need of repositioning.

Without a doubt, existing Manhattan hotels are magnificent properties. Yet current developers have put the push on to build NYC hotels rather than purchase real estate. Actually, the present demand from publicly traded investors for New York City hotels has made it more practical to develop an establishment rather than buy a building.

NYC Hotel Development

Due to funding difficulties, hotel developers steered clear of Manhattan and other NYC neighborhoods during the recession. Since the record increase in commercial property prices (highest since 2006), developers are returning to NYC boroughs. Except for Shanghai and Dubai, the Big Apple boasts the most guest rooms in the pipeline (25-2008, 27-2009, 34-2010, 22-2011, 23-2012, 9 in 2013, 68 in 2014 and beyond).

Bruce Ford, senior vice president of sales at Portsmouth, New Hampshire's Lodging Econometrics explains, "Right now, it can be cheaper to build than to buy in New York."

Select Service

In fact, 50 NYC hotels are slated to open between autumn 2011 and 2013. Pending developments include a diverse mix of lodging properties. According to Ford, a wide variety of "select-service type of hotels" is planned for New York City. At least half of the hotels slated to open between 2012 and 2013 will be in the economy, mid-scale, and upper-scale sector. Examples include a Holiday Inn on West 31st Street, Hampton Inn on Pearl Street in lower Manhattan, and a Days Inn in the Times Square area.

The year after next looks most favorable for many U.S. developers. Yet 2012 hotel construction should prove to be just as conducive to hotel development as any of the other promising years ahead for NYC lodging. Sixty-eight additional properties are expected to be completed by 2014 and shortly thereafter in the New York hospitality sector.

According to hotel consultants, Lodging Econometrics, such figures represent three times the number of hotel openings in Washington – the city with the second most construction activity in the US. New York takes the number one spot. Indeed, the NYC hotel market leads the cycle in the hospitality industry.

David Loeb, a hotel analyst at Milwaukee-based Robert W. Baird & Co, explains the appeal of NYC properties, “Manhattan is an under-supplied market because it’s a seven-day market. In one week in early October, New York hotels were 91.7 percent occupied. Very few other markets come close to that."

Manhattan Hotels

According to Real Capital Analytics Inc….

• January 1 – September 30, 2011 - average sale price per room - $505,157*

Between May and August 2011, 14 New York hotels sold for an asking price of more than $400,000 per room. The specific hotels include the Radisson Lexington Hotel, Four Points by Sheraton Midtown-Times Square, Affinia Gardens, and the Yotel. One highest price involved the sale by Morgans Hotel Group of the Royalton New York to Irving, Texas-based Felcor Lodging Trust Inc. (FCH) for $84.6 million ($500,447 per room.) According to a PricewaterhouseCoopers study, Affinia Manhattan's rooms sold for $560,685. Affinia Gardens with its residential-style suites could be purchased for $910,866 a room.

• January 1 – December 31, 2010 – average sale price per room – $344,799
• January 1 – December 31, 2009 – average sale price per room - $413,644
• 2006 peak – average sale price per room - $632,894
• Present – companies such as DiamondRock Hospitality Co. (DRH) & Hidrock Realty Inc.–developing hotels-$300-$450,000 a room

* Real Capital concludes that real estate investment trusts are driving the rise in prices for existing hotels. Purchases of lodging properties in Manhattan came in at $1.14 billion (38% of total traded in NYC) between January 1 and September 30, 2011.

Scharger's Story – NYC Hotel Construction

New hotel development in New York City requires the emptying and redevelopment of office buildings as well as demolishing present structures. Ian Schrager who pioneered of the boutique hotel concept has agreed to purchase a NYC development site. As well, Schrager's company is close to finalizing another Manhattan hotel deal. Although the developer has not released project details or proposed prices, Schrager has a plan to develop trendy but affordable lodging in major destinations. The $400,000-$500,000 per room prices make it easier to build a NYC hotel rather than buy an existing property.

Hotel Developers

DiamondRock Hospitality Co.

On January 18, Diamond Rock announced their plan to buy a hotel under development in the Times Square region by the combined efforts of Walton Street and Highgate Holdings. The sale price would be between $112.5 million and $135 million (almost $450,000 per room) – depending on the final guest room count. The planned hotel will open in 2013.

Starwood Capital Group LLC

Founded by Barry Sternlicht, Starwood Capital Group in partnership with Tribeca Associates LLC made a March announcement about their takeover of a development contract from Orient-Express Hotels Ltd. (OEH) for the New York Public Library’s Donnell branch on West 53rd Street. According to a March 16 article in Crain's New York Business, the purchasers expect to spend $400 million on the site (including condominiums, hotel rooms, and a library). The Greenwich, Connecticut-based Starwood did not comment on the cost of the project.

Extell Development Co.

In November 2010, Gary Barnett’s Extell Development Co. announced their intentions to build a 210-room, 135-condominium Park Hyatt Hotel on West 57th Street. This hotel should open in 2012. Extell has not revealed the cost of its development.

Marriott International Inc.

During August, the Maryland-based Marriott International, the largest publicly traded U.S. hotel company, joined with Granite Broadway Development for a 68-story Manhattan project at Broadway and 54th Street. The property will include two hotels (Courtyard and Residence Inn) planned to open in late 2013. The establishments are scheduled to open in late 2013. Marriott did not confirm the cost of the project.

Hidrock Realty Inc.

The New York Hidrock has two projects in the works. The company is redeveloping a former office building at 960 Sixth Ave. in Manhattan’s Fashion District. The final result will be a Courtyard for almost $300,000 a room. According to Hidrock president, Abraham Hidary, the $72 million purchase price includes a bank branch on the bottom floor. In addition, Hidrock has joined with Robert Finvarb Cos. to build SpringHill Suites on West 57th Street at a cost of $53.1 million ($320,000 a room).

NYC Hotel Occupancy Rates

New York City hotels had an 80% occupancy rate from January-August 2011. Besides Oahu, Hawaii, New York City had the second highest occupancy rates in the top 25 markets. Yet the array of new developments, as well as a slowdown in economic growth, could begin to affect occupancies and room rates. After all, the U.S. unemployment rate has been 9% or more in ten months of the past year. On September 27, Joel Ross, principal at Citadel Realty Advisors, investment banking and real estate financing firm, predicted that a decrease in bookings should show up next year. Corporate travel is expected to fall in 2012 as companies hold meetings at their own facilities rather than in hotels.

Slowing Economy

Bloomberg Industries data suggests that global financial firms will cut over 120,000 jobs this year. In addition, the Bank of America Corp. (BAC), the second largest U.S. lender by assets, is undertaking an overall review aimed at decreasing annual costs by $5 billion before the end of 2013. BAC expects to end 30,000 positions in the coming years.

Declining RevPAR

The new supply in the NYC hotel sector will mean a 1%-2% decrease during 2012 in revenue per available room (RevPAR - an industry measure of occupancy and rate). Jan Freitag, vice president at Smith Travel, is expecting a 5.5% rise in RevPAR by the end of 2011. Without a doubt, almost all planned Manhattan hotels will meet with success. New York City is an established and profitable market. The increased supply, however, will have a significant effect on RevPAR growth in 2012.

Building Manhattan Hotels Beats Buying as Development to Surge

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Smart investors have not failed to notice the increase in U.S. hospitality fundamentals and hotel profits. Private-equity funds, institutional buyers, REITs, insurance and pension plans, as well as offshore buyers, are investing in American hotels. Upscale properties are popular with knowledgeable investors.

Continued Recovery

Statistics for April-June 2011 show continued recovery in the U.S. hotel industry. Major hotel investment sales are on the rise across the country. Manhattan leads U.S. hotel transactions with year-to-date sales over $1 billion

Smart investors have not failed to notice the increase in U.S. hospitality fundamentals and hotel profits. Private-equity funds, institutional buyers, REITs, insurance and pension plans, as well as offshore buyers, are investing in American hotels. Upscale properties are popular with knowledgeable investors.

Continued Recovery

Statistics for April-June 2011 show continued recovery in the U.S. hotel industry. Major hotel investment sales are on the rise across the country. Manhattan leads U.S. hotel transactions with year-to-date sales over $1 billion

Smart investors have not failed to notice the increase in U.S. hospitality fundamentals and hotel profits. Private-equity funds, institutional buyers, REITs, insurance and pension plans, as well as offshore buyers, are investing in American hotels. Upscale properties are popular with knowledgeable investors.

Continued Recovery

Statistics for April-June 2011 show continued recovery in the U.S. hotel industry. Major hotel investment sales are on the rise across the country. Manhattan leads U.S. hotel transactions with year-to-date sales over $1 billion

Not just one – but two – Marriott brands are coming to a Manhattan tower – in a big way. In fact, the joint venture operating under a franchise agreement between Granite Broadway Development and Marriott International will be one of New York City's largest hotel ventures. Two new Manhattan developments – the 378-room Courtyard and 261-room Residence Inn Hotels – are expected to open towards the end of 2013.

New NYC Developments

The properties will be managed by Interstate Hotels and Resorts. Besides the two hotels, a 68-storey high-rise at Broadway and 54th Street will feature a restaurant and ground-floor shops. This massive project has been in the works for the last ten years.

Tallest NYC Lodging Property

John Fox, a senior vice president of PKF Consulting USA, has described the venture as "the largest new hotel project in New York since the 2002 opening of the 863-room Westin New York at Times Square." Of course, New York City is no stranger to huge hotel developments. In 2010, a 607-room Intercontinental hotel opened at 300 West 44th Street.

Granite Broadway Development and Marriott announced that the new building will be the tallest NYC property used strictly for lodging. PKF official, John Fox, backs up their claim. Fox explained that the new Marriott building at a height of about 753 feet is taller than the 682-feet Four Seasons Hotel on the north side of 57th Street between Madison and Park Avenues.

Courtyard and Residence Inn

Designed by Nobutaka Ashihara, the tower will have a main entrance on West 54th Street. The lobby for the Residence Inn will be on the building’s third floor. The Courtyard lobby will be located on the fourth floor. Courtyard guest rooms occupy floors 6-32. Residence Inn rooms take up floors 36-64.

Each hotel will have its own elevator banks. The project will include ground-floor retail space, a leased restaurant on the second floor, lounge and terrace with outdoor seating and Broadway views on the fifth floor, and a fitness center (available to guests of both hotels) on the 34th floor.

With its focus on corporate guests, The Courtyard will feature a contemporary design, flexible space, and a GoBoard - a 55-inch interactive touch screen providing guests with local information and news headlines. The Residence Inn, an extended-stay hotel, has guest suites with kitchens. Sitting above the Courtyard, Residence Inn will offer the development's best views of New York City and Central Park. No doubt, the entire project is well-positioned with its location and height.

Manhattan Hotels

Even though New York City is thriving with various hotel developments, the Marriott/Granite project is expected to flourish in Manhattan. Demand for NYC hotel rooms will continue to gain strength. By 2013, room rates are expected to regain their 2008 peak. Bjorn Hanson, the divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University, notes that the two Marriott hotels could reduce their annual operating expenses over 5% by sharing building facilities such as the fitness center as well as management and administrative staff and departments (housekeeping, marketing).

Marriott International

Marriott International owns 33 properties (including furnished apartments) under nine brands in Manhattan, Brooklyn, and Queens. The company manages about half of its hotels and the others are under franchise agreements. David Marriott (chief operations officer for the company’s eastern region - the Americas) says that New York is Marriott’s second-largest revenue generator in the United States. The New York Marriott Marquis is the company’s top revenue generator worldwide.

Granite Broadway Development

Granite Broadway Development, owned by the Gross family, have five Marriott hotels (one in Philadelphia, as well as Ghent, Belgium, and three in New York - the Courtyard New York JFK Airport, the Courtyard New York Manhattan/Times Square South, and the Residence Inn Manhattan/Times Square).

Two Marriott Brands Are to Share Space in Manhattan Tower

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Mostly, hotels want to be known for having excellent accommodations and exceptional customer service. Of course, the Mercer Hotel in NYC's SoHo neighborhood is no slouch in that department. Yet at present, the Mercer Hotel is in the news for being first with the music. Reports are that the Mercer Hotel might just be the site of the "first noteworthy hip-hop album to be recorded in a hotel room."

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Sources told the New York Post that Kanye West and Jay-Z were in the Mercer Hotel last week recording an album. In August 2010, West announced that he was teaming up with Jay for a joint album. During January 2011, the pair released 'H.A.M.' – the first single from the joint album – "Watch the Throne." The album is scheduled to be released in March.

Now sources say that the talented twosome is completing the album at the Mercer Hotel. Reports suggest that the musicians have taken over an entire floor of the hotel. Apparently, the pair has moved in their equipment and continues to work on the album.

Not every guest at the Mercer, however, might be pleased with this arrangement. Whether or not guests are fans of the pair, they might prefer to hear them at a concert rather than at breakfast. Yet if this story is accurate, it spells good publicity for the Mercer in the long term. The hotel would be known as the site of the recording of the Kanye West and Jay-Z album.

That recognition will arouse considerable interest and not just among hip-hop fans. The act of recording music in hotel rooms has its place in history. Actually, the practice dates back at least a century.

One of the most famous recordings in a hotel was done by Delta blues legend – Robert Johnson. The independent guitarist laid only 29 tracks before his death in 1938. Sixteen of these tracks were recorded in the Gunter Hotel in San Antonio, Texas. Maybe the Mercer hotel is now in the midst of making music history.

KANYE WEST & JAY-Z RECORDING 'WATCH THE THRONE' IN NYC HOTEL

Mercer Hotel

Of course, the Mercer Hotel is memorable with or without the music. The 6-floor, 75-room, Romanesque-style Mercer Hotel is one of SoHo's most luxurious hotels. This boutique hotel offers the pleasure of loft living in the most elegant oasis.

The Mercer prides itself on being a small luxury hotel capable of providing the utmost personalized service. This hotel plays up its distinction at every level and pays attention to each detail. Guests enjoy a unique experience in stylish but subtle surroundings with every convenience in an intimate setting. Vogue described the Mercer as the "hottest hotel in New York."

No official sources from the hotel have confirmed the sounds of music. Yet it is hard to hide the sounds of a hip-hop recording. Hip Hotels said that the Mercer "was unlike any other hotel in New York, maybe the world." Is it hip enough for a hip-hop duo?