JLL Hotels & Hospitality is marketing a stake in $600 million Manhattan hotel portfolio.
Cindat USA LLC and Hersha Hotels & Resorts are looking for “preferred equity proposals” for their seven-property select service portfolio totaling 1,087 rooms.
It includes the Candlewood Suites in Times Square, Hampton Inn Chelsea, Hampton Inn MSGA, Hampton Inn Times Square South, Holiday Inn Express Times Square, Holiday Inn Express Wall Street and the Holiday Inn Wall Street.
Cindat bought a 70 percent share in the portfolio from Hersha for $571 million in 2016 and the joint took out a new $300 million mortgage loan and $85 million of mezzanine financing two years later.
According to JLL, “The offering will provide an investor with the opportunity to invest in a portfolio of high-quality, fee simple non-union select service assets at an attractive basis, with long-term committed ownership.”
The hotel sector has been decimated by the COVID-19 pandemic and more than 150 remain closed in New York alone with 35,000 employees on furlough (union and non-union hotels), according to the Hotel Association of New York. Employment in the leisure and hospitality sector down 44 percent, according the U.S. Bureau of Labor Statistics.
Investment is also down citywide with hotel sales volume falling 81 percent year-over-year to $294 million. Just six hotel trades took place in the first half of 2020 at an average price of $48,992,413 a drop of 37 percent year-over-year.
While many analysts believe the hotel sector will take four years to recover, JLL’s offering point’s the New York’s historic resilience in the face of pace economic downturns.
Following the 2007 financial crash, RevPar subsequently grew 30 percent and hotels constituted a nearly $11 billion industry that employed more than 55,000 people in the city.
JLL also anticipates a 20 percent decrease in Manhattan hotel supply, “resulting in favorable long-term market dynamics.”