The Blackstone Group is looking to sell its leasehold interest in the London New York hotel at 151 West 54th Street, The Real Deal has learned. Blackstone is looking for at least $500 million for the property, sources said.
The multi-national private equity giant has tapped the commercial real estate brokerage firm Eastdil Secured to market the 575,241-square-foot, 562-room hotel, which it has owned since 2004. The fee owner of the site is the estate of Sol Goldman, to which Blackstone reportedly pays some $3.7 million per year in rent. Blackstone’s lease has 123 years remaining.
The decision to sell the leasehold comes shortly after the firm announced it would sell its London West Hollywood hotel in Beverly Hills, and tapped Eastdil for the job in April.
Blackstone purchased the leasehold for the 54-story New York property from Lehman Brothers for $193 million, or $381,000 per room. Blackstone ended the hotel’s operating agreement with Marriott and struck up a new partnership shortly after with its own affiliate Luxury Resorts, which continues to run the hotel.
LXR refurbished and repositioned the property, which is located between Sixth and Seventh avenues, plowing nearly $100 million into a renovation spearheaded by designer David Collins. That renovation was completed in 2007. Chef Gordon Ramsay operates two restaurants at the hotel, Gordon Ramsey at the London and MAZE by Gordon Ramsey. The contract with LXR could be terminated upon the sale of the hotel, sources said.
While Blackstone’s global head of real estate Jonathan Gray declined to comment on the decision to sell the hotel, he told an audience at the Pierre Hotel this week that people “draw too many conclusions” from the company’s decisions to sell key assets and that those decisions are often just symptomatic of “the nature of the closed-end fund business,” which regularly sees funds sell off assets after their repositioning is complete.
Indeed, Blackstone has also been in hotel acquisition mode. Blackstone Real Estate Advisors reached an agreement with real estate investment trust Hersha Hospitality Trust to acquire 16 U.S. hotels for $217 million in September.
Blackstone is also looking to sell a 9,000-square-foot carriage house building at 154 West 55th Street, which is directly connected to the hotel. The property could be converted to for-sale residential units.
The Eastdil brokers representing the property include CEO Roy Hilton March, senior managing director Larry Wolfe, managing director Mark Schoenholtz and director Michele Mahl.