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Brookfield nears deal to buy the Hotel Indigo for $160M
The owners listed the 294-key property last year asking north of $176M
Brookfield Property Partners, which has been scooping up retail on the cheap, is now turning to hotels.
Brookfield, through one of its private real estate funds, has signed a letter of intent to buy the Hotel Indigo on the Lower East Side from Brack Capital Real Estate for $160 million, sources told The Real Deal.
The 294-room hotel, which sits just south of East Houston Street between Ludlow and Orchard streets, was still stabilizing in 2017 – its first full year of operation.
Representatives for Brookfield and Brack Capital did not immediately respond to requests for comment.
Brack Capital and partner InterContinental Hotels Group bought the stalled development site at 171 Ludlow Street (also known as 180 Orchard Street) for $46.4 million in 2011 from developer Morris Platt, and completed construction of the 26-story building by 2015.
Brack and InterContinental sold the retail condominium at the base of the building and its parking garage that year to Meir Cohen’s Cohen Equities and Premier Equities for $21 million. Then the developers listed the hotel portion last year with the hotel investment-sales team at Eastdil Secured led by Larry Wolfe, who recently jumped to Newmark Knight Frank with three of his teammates.
The sellers were looking to get $600,0000 a key, or north of $176 million, for the property. But Brookfield’s offer of $160 million represents a discount of nearly 10 percent off that price.
Another hotel, the W Union Square, is under negotiation to trade at a discount to its previous purchase price. Westbrook Partners last week was close to signing a contract to buy the hotel for $168 million, another reduction of roughly 10 percent from the $185.3 million seller Host Hotel & Resorts paid for the 270-key property in 2010.
Brookfield, meanwhile, paid $31.5 million earlier this year to buy four retail properties on Bleecker Street in Greenwich Village from New York REIT, which had spent nearly $45 million acquiring the properties between 2010 and 2012.
The Canadian-based investor and developer is planning on using the storefronts as a sort of incubator to test new retail concepts. Brookfield in March also made a second, $15.7 billion bid to buy the remaining 66 percent of shares it doesn’t already own in General Growth Properties – a price that many see as a deep discount to the value of the REIT’s properties.
Brookfield is also buying the massive, 1,300 market-rant rental megaproject in the South Bronx from Somerset Partners and the Chetrit Group for $165 million. And the developer announced last week that it will build two more market-rate apartment towers at the massive Greenpoint Landing site in Brooklyn with the Park Tower Group.