Palace Hotel to sell for $400M

May 19, 2011 09:05AM

Midtown’s famed Palace Hotel is in contract to be sold to investment advisory firm Northwood Investors for around $400 million, or $445,000 per room, the Wall Street Journal reported.

The 30-year-old Palace, at 455 Madison Avenue, has only changed hands once before and is being sold by the Brunei Investment Agency, which bought the 899-room hotel in 1993.

Northwood was founded by former Blackstone Real Estate CEO John Kukral, who said in a statement that he plans to “grow the [Palace] business and further enhance its stature as a world-renowned luxury hotel.” The deal is expected to close in mid-July.

New York City hotels have been selling at a fast clip in recent months. Earlier this week, DiamondRock Hospitality officially announced that it would pay $335 million to buy the Radisson Lexington Hotel in Midtown, and earlier this year, the New York Helmsley hotel was sold to Host Hotels & Resorts for $313.5 million. Felcor Lodging Trust, meanwhile, is set to buy the Royalton and Morgans hotels, both in Midtown, for a combined $140 million.

According to Real Capital Analytics, the median price per room for New York City hotels in the year that ended in March was $435,000. [WSJ]