Maefield Development acquired the leasehold interest in the Doubletree Guest Suites Times Square hotel from Sunstone Hotel Investors for a purchase price of $540 million.
The deal for the 468-room hotel at 1568 Broadway is valued at just over $1.15 million per key, with Maefield announcing a “planned redevelopment of the property into a premier cultural entertainment, retail and hospitality experience” in the middle of Times Square.
That redevelopment would include a renovation of the hotel, as well as street-front retail and entertainment space and a new “super-high-resolution” LED screen on the building’s facade, Indianapolis-based Maefield said, as well as the restoration of the historic Palace Theatre at the site.
Howard Michaels‘ Carlton Group advised Maefield on the financing of the acquisition. Maefield is also a stakeholder in the 20 Times Square hotel, retail and entertainment development located across the street from 1568 Broadway.
Sunstone – a California-based real estate investment trust that has interests in 29 hotels comprised of nearly 14,000 rooms across the country – said the sale represents more than 25 times the Doubletree’s forecasted adjusted EBITDA of $21.3 million for 2015, as well as a 3.4 percent capitalization rate on forecasted 2015 net operating income.
The REIT acquired its interest in the hotel property from a partnership led by Goldman Sachs unit Whitehall for $286 million in January 2011. – Rey Mashayekhi