The Westin Grand Central hotel – once called “gloriously tacky” thanks to its Leona Helmsley-designed 1980s décor – is ready for its next act.
Asset manager Davidson Kempner Capital Management is planning to spend more than $20 million to renovate the $302 million hotel in Midtown East, which it just bought with financing from Goldman Sachs.
The Plaza District-based investor closed Thursday on its purchase of the 774-key hotel one block away from Grand Central from seller Host Hotels and Resorts, a source with knowledge of the transaction told The Real Deal.
Host Hotels, the Maryland-based real estate investment trust, announced the closing Thursday, but did not identify the buyer.
Goldman Sachs provided Davidson Kempner with $197 million in short-term, floating-rate debt to acquire the property at 212 East 42nd Street between Second and Third avenues and fund its renovation.
Representatives for Davidson Kempner and Goldman Sachs could not be immediately reached for comment.
JLL’s Jeffrey Davis negotiated the sale on behalf of Host Hotels, and his JLL colleague Kevin Davis secured financing on behalf for the new owner. The brokers declined to comment.
Developed in 1981 by Harry Helmsley, the 41-story hotel featured design touches that were in vogue during the era such as red-and-gold carpet, and a pair of attached golden H’s mounted over the front desk.
Leona Helmsley, also known as the “Queen of Mean,” reportedly lorded over the hotel’s operations and staff. Her estate sold the property in 2011 for $313.5 million to Host Hotels, which closed the hotel for 18 months and spent to $75 million to renovate the building and replace the dated design.
Host Hotels repositioned the property and opened it the following year under Marriott International’s upper-upscale Westin brand.
But the new hotel opened in 2012 amid a wave of new competitors, and net income at the property declined, according to Real Estate Alert, which identified Davidson Kempner as the buyer in November.
The new owner is working on a long-term agreement with Marriott to keep the hotel under the Westin flag, sources told TRD.
This is Davidson Kempner’s first purchase of a major hotel in the United States, per Real Estate Alert.