Qatari group closing soon on $535M Times Square hotel
With city approval, site could accommodate a 900,000-square-foot tower
UPDATED, 11:35 a.m., Feb. 20: Qatari investment firm Al Rayyan Tourism and Investment is closing in the next few days on the acquisition of the 689-room Manhattan at Times Square Hotel for $535 million, industry sources said. The deal could give rise to a new tower of as much as 900,000 square feet.
The buyer, known as ARTIC, is a subsidiary of Al Faisal Holdings, which is controlled by Qatar’s ruling Al Thani family. ARTIC is buying a 97 percent stake in the building, which is owned by Rockpoint Group, Highgate Hotels and a Goldman Sachs fund. The 22-story, 500,000-square-foot tower, which has an address of 790 Seventh Avenue or 1656 Broadway, covers a full city block bounded by Seventh Avenue, Broadway, and 51st and 52nd streets.
Rockpoint, Highgate and Goldman Sachs purchased the building from Starwood Hotels & Resorts in 2012 for $275 million.
Insiders said the new owners are eyeing options including constructing a new building on a portion of the parcel where there is now a swimming pool, or demolishing the entire structure and erecting a 900,000-square-foot tower. The buyers inked the contract last year to purchase the hotel.
The new owner could develop about 600,000 square feet as-of-right, but if the site were put through the city’s uniform land use review process, known as ULURP, the building could grow to as much as 900,000 square feet, a person familiar with the site said.
The retail could be renovated, in an area where rents are about $500 to $600 per square foot on the ground floor facing Broadway.
The building traded at a capitalization rate of between 3 percent and 4 percent, the source said. Mark Elliott and Rudy Reudelhuber of Hodges Ward Elliott brokered the deal, which was marketed by Eastdil Secured’s Doug Harmon, Adam Spies and Mark Schoenholtz. This is the third large Manhattan hotel transaction involving Eastdil over the past few months that included foreign buyers.
Hilton Worldwide Holdings announced today that it closed on the $1.95 billion sale of the Waldorf Astoria hotel at 301 Park Avenue to the Chinese insurance firm, Anbang Insurance Group.
And earlier this month, another Chinese insurance firm, Sunshine Insurance Group, inked a deal to purchase the Baccarat Hotel from Barry Sternlicht’s Starwood Hotels & Resorts Worldwide for upwards of $230 million, or a record $2 million per room.