Starwood Capital Group is on the brink of clinching a deal with Host Hotels & Resorts for the sale of the 1 Hotel Central Park, as Manhattan's hotel sector experiences a surge in room rates, sparking investor interest, reported Bloomberg, citing sources.
The transaction is yet to be finalised and could still collapse, according to sources who preferred to remain anonymous.
The 1 Hotel Central Park, a venture by Starwood that opened in 2015, is part of billionaire Barry Sternlicht's 1 Hotel brand. Known for its ivy-clad exterior and a restaurant offering seasonal dishes by chef Jonathan Waxman, the hotel boasts approximately 230 guest rooms.
In 2016, Starwood had sought more than $1m per guestroom for the hotel but this initiative did not lead to a divestment.
Host Hotels & Resorts, led by CEO Jim Risoleo, has been actively expanding its portfolio, having recently acquired the Turtle Bay Resort in Hawaii from Blackstone for about $680m, adjusting for key money. This follows a pattern of strategic purchases by the company.
The Manhattan hospitality sector is currently reaping the benefits of increased pricing power. Factors such as a crackdown on short-term rental listings and a local initiative to accommodate migrants in hotels have tightened the supply of rooms. Additionally, new city regulations are expected to curb future hotel development, potentially enhancing the value of existing properties.
In a recent move, Starwood Capital Group, along with Crescent Real Estate and High Street Real Estate Partners, announced the completion of another significant transaction in May 2024.
The dual-branded 1 Hotel and Embassy Suites in Nashville, Tennessee, was sold to Host Hotels & Resorts. The Nashville property features an 18-storey 1 Hotel and a 30-storey Embassy Suites by Hilton, which opened in 2022. The financial terms of the deal were not made public.
