The Real Deal New York

BET founder’s REIT loses $69M Queens Marriott to lender

August 18, 2011 04:43PM
By Adam Pincus

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From left: RLJ Companies Chairman Robert Johnson and the Marriott hotel at 102-05 Ditmars Boulevard

A recently launched lodging real estate investment trust led by Black
Entertainment Television founder Robert Johnson gave up to its lender a 438-room Marriott hotel near LaGuardia Airport that it acquired in 2007 for $69
million.

Johnson’s RLJ Lodging Trust, one of several entities that make up his Bethesda,
Md.-based RLJ Companies, turned over the 10-story property at 102-05 Ditmars
Boulevard in East Elmhurst to lender Capmark Financial Group. The Aug. 5
deed-in-lieu transfer, which had been long expected, valued the property at
$61 million, $3 million over the $58 million first mortgage, city property records
published yesterday show.

The property in March 2011 was worth less than the mortgage, the company
reported in its second-quarter 2011 report. Even as prices remain lower than
the peak in New York City, the market for hotels in Manhattan is active.

The REIT RLJ Lodging was launched in May 2011. The company was previously
operated as RLJ Development, which bought the 261,267-square-foot property
in January 2007 for $68.9 million from LaSalle Hotel Properties, also based in
Bethesda, Md., city property records show. The hotel is directly across Grand
Central Parkway from the airport terminal.

Thomas Baltimore, president and CEO of RLJ Lodging, was not available for
comment. Capmark did not respond to requests for comment.

As of June 30, RLJ Lodging owned 141 hotels with 20,924 rooms in the United
States. The REIT owns three hotels in Manhattan, the Hilton Garden Inn New
York at 63 West 35th Street in the Fashion District; the 755-room Doubletree
Metropolitan Hotel
at 569 Lexington Avenue in Turtle Bay; and the 280-room Fashion 26 at 152 West 26th Street in
Midtown South.

In the announcement of the LaGuardia Marriott acquisition in 2007, the company
said it would spend an additional $11.5 million in renovating and repositioning the
hotel.

According to the REIT’s second-quarter 2011 earnings released this month,
RLJ Lodging reported that in February 2010, Capmark notified RLJ that the loan
which matured in July 2010, was in default. In April 2011, RLJ put the deed in
escrow, and on Aug. 5, the lender took title through the deed-in-lieu.

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