Barry Sternlicht

From the August issue: Barry Sternlicht started his company, Starwood Capital Group, during a downturn — and recently he’s been expanding it, especially here in New York.

Since the beginning of the year, Sternlicht, the firm’s chairman, has been ramping up his Manhattan deal-making.

The brains behind the iconic “W”brand, he’s picked up a slew of Manhattan properties in the last few months, including 1414 Avenue of the Americas, and the former Donnell Library on West 53rd Street, among others.

While Sternlicht has been one of the most active real estate players of the downturn, the focus on New York marks a shift from 2009 and 2010, when he concentrated on distressed properties in other parts of the country. Notable was his company’s 2009 deal to buy a 40 percent stake in Corus Bank’s distressed loan portfolio for $554 million after the lender was shut down by regulators. [more]

Starwood Capital Group, best known for its W Hotels brand, is planning to up its bid for bankrupt hotel chain Extended Stay, a lawyer for the company said in court. (Note: correction appended). Starwood had been previously outbid by a group of investors led by Centerbridge Partners and Paulson & Co. and joined yesterday by Blackstone Group, who offered $905 million for the 680-property chain. The offer is considered by the investors and by Extended Stay to be the stalking horse bid, meaning other offers would need to exceed it. Extended Stay filed the largest-ever bankruptcy in the hotel industry in June with $7.6 billion in debt. The deadline for proposals is May 17 and an auction is scheduled for May 27. [Bloomberg]

Occupancy and average daily rates are on the rise for New York City hotels, as well as the velocity of sales of hotels in New York City.

New York City posted the largest occupancy increase among the top 25 markets, rising 15.9 percent to 65.5 percent, according to Smith Travel Research data for the week ending Feb. 6.

So far this year, Pennsylvania-based Hersha Hospitality Trust and a Northern Mariana Islands-based alone have purchased five New York City hotels.

Hersha, owner of upscale, mid-scale and extended stay hotels, announced that it closed on the acquisition of three newly-opened hotels in Times Square. The company acquired the Hampton Inn, Candlewood Suites and Holiday Inn Express Times Square. The total price for the three Times Square properties was $165 million, including 1.5 million units of limited partnership interests that were issued to the sellers.

Jay Shah, CEO of Hersha, said, “We were able to acquire the Holiday Inn Express in Times Square for an incremental $55 million, thereby lowering our basis for the three hotels to approximately $284,000 per key, which is below replacement cost and is expected to further increase our initial cash yield on the investment.” [more]

In a segment called “How I Built It,” Barry Sternlicht talked to the Wall Street Journal about how he founded Starwood Capital, the real estate investment firm that founded Starwood Hotels and Resorts and, subsequently, the W Hotels brand, which includes W Union Square – New York, and the Westin Hotels line. “I borrowed money from friends and invested what I had… and I borrowed a million dollars, which is a lot when you’re 31 and have a net worth of about $100,000,” Sternlicht said.

Steven Kamali, owner of Steven Kamali Hospitality, announced today that his business is expanding, citing a rising demand in hospitality consulting as the driving factor. The company, which offers real estate, development and branding consultancy to hotels, restaurants and other businesses, has worked with the Smyth Tribeca hotel, Trump International, Cipriani USA, W Hotels, the Carlton Hotel, and others. The firm plans to hire nine new employees and move into a new 3,000-square-foot office in the Meatpacking District.TRD