The Real Deal New York

The New York Renaissance Hotel isn’t profitable. And its owner can’t wait to sell

Apple Hospitality CEO says NY hotel market is "significantly depressed"
By Eddie Small | February 27, 2018 05:20PM

690 Lexington Avenue and Apple Hospitality’s Justin Knight

Apple Hospitality isn’t long for the New York City hotel market. The real estate investment trust is looking to sell its only New York City hotel.

Executives for the company said in an earnings call on Thursday that the New York Renaissance Hotel 57, a Marriott at 130 East 57th Street, was not profitable and that selling it was a top priority, according to a transcript of the call.

CFO Bryan Peery said that the company “recorded 38 million noncash impairment charges” related to the hotel during the fourth quarter and that they are “disappointed” with its performance. He also said he expects it to be affected by factors such as “a decline in hotel market conditions in the city, continued anticipated new supply and the loss of retail tenants of the property.”

Justin Knight, CEO of the company, echoed these comments, saying that the New York hotel market has been “significantly depressed” and that the New York Renaissance “produces negative cash flow” for Apple Hospitality.

The 17-story hotel spans 111,000 square feet and has 261 rooms. It was completed in 1923 and used to be known as the Allerton Hotel for Women.

Apple owns hotels in 34 states, including four in New York, though the others are on Long Island and in Syracuse.

The city’s hotel market has undoubtedly dipped in the last year. Gaw Capital Partners paid about $340 million for the Standard Hotel along the High Line, about $60 million less than what it went into contract for in 2014. And PGIM Real Estate took a hit when it sold the James Hotel to Thor Equities for $66.3 million, far less than the $83 million it paid in 2013.

UBS Realty put its 213-key Quin hotel at 101 West 57th Street on the market last year, but a buyer has not emerged.