Lexington Realty Trust has closed on a $338.2 million deal to sell the land under three hotels in Midtown, Tribeca and the Financial District.
According to a company representative, the transaction covers Element New York Times Square West at 311 West 39th Street, the Sheraton Tribeca New York Hotel at 372 Canal Street and the DoubleTree Financial District at 8 Stone Street. The sites represent Lexington’s last three land investments in New York City.
“The disposition of our remaining New York City land investments turned out to be a great success. These investments produced strong cash flow and capital appreciation for our shareholders and the sale came in at better than expected pricing. Furthermore, the sale has reduced our leverage considerably and produced cash to retire the outstanding balance on our revolving credit facility and fund other growth opportunities,” said Lexington President and CEO Wilson Eglin.
The three hotels, which were all designed by architect Gene Kaufman, contains 1,179 rooms. This is not Lexington’s only land sale in New York City this year. The company also sold the land under the Holiday Inn Express at 15 West 45th Street in Midtown for $37.5 million.
The sales are part of Lexington’s strategy to offload assets. During a conference call last February, Eglin said that they are looking to generate between $600 to $700 million through asset sales.
Lexington refused to identify the buyer. However, a report from the Real Deal named Los Angeles investment firm BH Properties as the new owner of the sites. According to Lexington, the buyer assumed $213.1 million of mortgage debt on the property.