BET founder Robert Johnson’s RLJ Lodging Trust has purchased the distressed Upper East Side Courtyard by Marriott, Crain’s reported. The 226-room hotel, at 410 East 92nd Street near First Avenue, was sold for $82 million, or $363,000 per room at a 7.5 percent capitalization rate on the hotel’s projected 2013 operating income.
RLJ noted in a statement that the price is “considerably lower” than what was paid in other recent hotel acquisitions. The trust also bought a Marriott in Bethesda, Maryland, a suburb of Washington, D.C., as part of the transaction.
The Upper East Side hotel has been in financial trouble since 2008, just two years after Madison 92nd Street Associates, an affiliate of Madison Equities, opened the hotel. At the time, lender General Electric Capital sued to foreclose on a $62 million mortgage on the building. In August, the owners filed for bankruptcy protection on the property listing assets of as much as $500 million and debt of $100 million.
General Electric, which was owed $74 million by then, scheduled a foreclosure sale and RLJ was the only bidder, according to Crain’s.
In August, RLJ lost a separate New York City Marriott property, near LaGuardia Airport in Queens, to lender Capmark Financial Group. The company said it purchased the Upper East Side Marriott with available cash and credit facility proceeds. [Crain's]