Electra America Hotel Group possesses caught up Roger New York Midtown hotel for $ 19 million, Commercial Observer has learned.
The company – a joint venture between Florida based Electra America and AKA Hotel Residences – closed on the sale of the right to lease the 193-room hotel in 131 Madison Avenue of Pebblebrook Hotel Trust Tuesday, sources said. Electra was able to snatch the hotel at a discount of nearly $ 71 million from its last transaction in 2010.
Pebblebrook announced the sale on June 11 – but did not name the buyer – and said the proceeds would be used for “general business purposes, which may include reducing the company’s outstanding debt and / or acquiring and investing in hotel properties ”.
The sale was organized by Eastdil secure‘s Scott Ellman, while Cronheim Hotel Capital ‘s David Turley negotiated the loan to acquire Maxim Capital Group. Maxim’s loan includes a construction and project loan to modernize and rename the hotel, sources said.
Eastdil and Maxim officials declined to comment. An Electra representative did not immediately respond to a request for comment.
LaSalle Hotel Properties bought the hotel leasehold interest for $ 90 million in 2010, and he transferred ownership to Pebblebrook in 2018 when the real estate investment trust bought LaSalle for $ 5.2 billion.
The land lease, which is belonging to Madison Baptist Church, is nearly 23 years old, according to Pebblebrook’s announcement. Formerly known as Roger Williams Hotel, the asset was named after the colonial ruler of Rhode Island who founded the first Baptist church in the United States
The Roger Hotel agreement marks one of the first acquisitions of the joint venture between Electra and AKA, which launched a $ 500 million investment fund in February to recover hotels in distress across the country.
While the boutique hotel is currently closed for renovations, it will reopen in spring 2022, according to its website.
The coronavirus pandemic has ravaged the city’s hotel industry, forcing hundreds of people to close and several distressed properties to swap hands.
Mack Real Estate Group took control of a hotel portfolio of seven Manhattan properties in May after having seized its owners; AllianceBernstein transferred the land lease for the financial district Hotel Motel to his lender Tribeca Associates in May; and Katara Hospitality grabbed the land lease for the Dream city center hotel after the owner defaulted on his $ 80 million loan.
The tourism industry has slowly started to bounce, but city hotels shouldn’t hit normal occupancy rates until 2025. And the New York Legislature recently passed a bill allowing the state to purchase and convert the growing number of hotels in permanent affordable housing.
That hasn’t stopped some from entering the city’s hotel market during the pandemic. In April, Jeff Sutton‘s Properties of Wharton deposit plans to transform its two-story commercial building at 25, 34th Street West in a 363-room hotel.