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Highgate buys David Werner’s stake in Row Hotel, now a migrant shelter
Times Square hotel has had an eventful few years
Highgate acquired David Werner’s interest in Manhattan’s Row Hotel in a deal worth around $350 million after an eventful few years for the hotel.
The 1,331-key hotel, which is being used as a migrant shelter, was put on the market earlier this year, but the hotel’s complicated ownership created challenges.
David Werner’s investment group owned the ground underneath the hotel at 700 Eighth Avenue, while a group led by Highgate owned the hotel through a long-term lease. In 2020, Werner’s group defaulted on a $275 million loan and its lender initiated a foreclosure, according to sources.
The lender essentially took control of Werner’s stake and reached an agreement with Highgate to put the property up for sale.
The property went up for sale to outside bidders, but Highgate ended up reaching a deal with Werner and his lenders to buy Werner’s stake and obtain full control of the hotel property.
An Eastdil Secured team led by Scott Ellman and Jeff Davis brokered the deal.
The Row Hotel is one of more than 100 in New York City that have been converted into migrant housing. In late 2022, the city signed a $40 million contract to rent out the hotel.
The hotel, constructed in 1928, has been troubled by the pandemic and its convoluted ownership structure. In 2010, Highgate and Rockpoint partnered to buy the property for $200 million. The group sold the ground lease to Werner and Deutsche Asset & Wealth Management for $325 million in 2013. A year later, Thor Equities bought the retail condo at the building.
In 2019, Highgate and Rockpoint tried to sell the hotel for $220 million, but no buyer emerged.