A stalled 205-room Hilton Garden Inn project in Midtown East is preparing to see new life. Hersha Hospitality Trust, a Philadelphia-based hotel REIT, is entering into a $74 million deal to acquire the development site at 52nd Street and Third Avenue, Globe St. reported.
The seller was RS206 LLC, a business that Hersha has worked with in the past, according to Ashish Parikh, CFO at Hersha. The selling price comes out to approximately $361,000 per key.
Hersha will provide $17 million to the seller as a non-refundable deposit and upon completion, the company will assume or pay $42 million of first mortgage debt, as well as making an additional $15 million cash payment.
Parikh told Globe St. that the hotel’s location, near iconic structures such as Grand Central Station, Rockefeller Center and the United Nations, and the 20 million-square-foot office market in Midtown East, drew Hersha to the deal.
“Midtown East is one of the best office submarkets in Manhattan, and there are no other hotels being built there at this time,” Parikh said. “There’s no Hilton Garden Inn product as well. There are very high barriers to entry and very high office demand.” [Globe St.] —Christopher Cameron