Burnett Equities buys NYC Hotel Martinique New York on Broadway for $ 55 million
Oklahoma City-based Burnett Equities acquired NYC Hotel Martinique New York on Broadway for $ 55.5 million from Herald Hotel Associates. The property plans to invest an additional $ 55 million to redevelop the 531-room property for a total investment of $ 110 million. The property is one of the oldest operating hotels in New York City, and is a historic property.
In addition to the designation of the property as a benchmark, the transaction presented a number of challenges. The property is syndicated and on a land lease with almost vacant commercial space. Additionally, the property was subject to bankruptcy, which was filed in 2020 as the pandemic closed the property. As a result, the sale lasted almost 12 months, including the marketing process.
Eric Anton and Nelson Lee of the Marcus & Millichap Manhattan office represented the sellers in the transaction and secured the buyer. In addition to negotiating the deal, the team also bolstered the property’s value by securing six retail leases for the property amid the pandemic and in just three months.
Mission Capital Debt & Equity, which is part of Marcus & Millichap Capital Corporation and Matthew Polci, Steven Buchwald, Jordan Ray and Lexington Henn of MMCC, Burnett Equities has secured a $ 71 million mortgage and a more fundable ground lease.
The New York City hotel market has been hit hard by the pandemic, but investors are stepping up this year to buy and renovate hotel products – and there have been some major deals. In July, MCR, Three Wall Capital and Island Capital Group formed a joint venture to to acquire The Lexington Hotel, Autograph Collection by Marriott for $ 185 million. The property has 725 rooms, which equates to a selling price of $ 225,000 per door. Like many hotel properties, the Lexington Hotel was closed during the pandemic. It is scheduled to reopen in August, and the new owner says the property is on track to meet that goal.
The hotels that have maintained a strong performance this year are particularly attractive. Debt markets for hotel finance continue to grow as capital becomes more readily available, spreads continue to tighten and conditions improve. This favorable funding environment continued to support higher underlying real estate values ââand growing transaction activity, in particular for top and best performing hotels.
In contrast, hotels located in downtown Manhattan will have the most trouble. bounce. Visits to downtown hotels fell sharply in August to more than 30% less than in 2019, according to a new study from Placer.ai.