Pebblebrook Hotel Trust has taken full ownership of two hotels in Manhattan.
The firm, which assumed control of the properties by redeeming its 49 percent interest in a joint venture with Denihan Hospitality Group, now owns Affinia Manhattan NYC at 371 7th Avenue and the Affinia Dumont NYC at 150 East 34th Street.
According to Thomas Fisher, the Chief Investment Office of Pebblebrook, the deal is part of their retreat from the New York City market. “The completion of the redemption and asset exchange is an important achievement toward our objective of reducing our investments in New York,” he said. “We are actively marketing these two hotels for sale and continue to be encouraged with the interest shown by the investment community, from both domestic and international investors, in high-quality Manhattan real estate.”
The two hotels have a combined 870 rooms. The joint venture acquired the properties, along with four other Manhattan hotels, in 2011. Pebblebrook bought its share in the joint venture for $152 million, according to the Wall Street Journal.
The portfolio, which includes The Benjamin, Fifty NYC, Shelburne NYC and Gardens NYC, is valued at $820 million. Manhattan NYC and Dumont NYC account for almost half of the portfolio’s value with a valuation of $342.5 million.
Pebblebrook is looking to reduce its exposure to New York as the city’s hotel market faces pressures due to oversupply and home-sharing service like Airbnb. According to JLL’s Hotel Intelligence report from last June, 2016 will be at a “normalized” level compared to record numbers from 2015. Last year, hotel transaction volume across the city exceeded $6.6 billion.