January 26 ~ Domain Properties has closed on the sale of the Avalon, a midtown luxury hotel located at 16 East 32nd Street. Haim Yagen, Domain’s principal, represented the seller and buyer. This upscale four-star, 12-story, 100-room, 71,250-square-feet building is a unique hotel in a prime Manhattan location. Prior to the acquisition, the property was managed by Vincci Hotel Management.

January 3 ~ Magna Hospitality (private operating company) sold the 146-room upscale Hampton Inn 35th St. Empire State Building to Rockbridge Capital (institutional investment advisor) for $69,500,000 ($476,027 per room).

January 19 ~ The 480-room Novotel Hotel Times Square was sold by Accor SA (public operating company) to Chartres Lodging Group (private operating company) and Apollo Global Management (opportunity fund) for a sale price of $91 million. The broker for the deal was Jones Lang LaSalle.

Apollo and Chartres will spend a huge $86 million (almost as much as the sale price) to renovate the Midtown hotel. The overhaul will upgrade the property's air-conditioning system, refurbish its lobby and restaurants, revamp the guest rooms, as well as add a meeting space and suites, along with other changes. The hotel will remain open during renovations. Accor maintains a 25-year managing agreement.

January 20 ~ Assa Properties (public operating company) announced the sale of the hotel portion of Cassa Hotel and Residence at 70 West 45^{th Street to HNA Property Holding Group (government entity) for $130,000,000 ($787,879 per room). The Chinese corporation, HNA Property Holding Group, plans minor renovations for the hotel. In addition, the buyers will rebrand the stylish Midtown Manhattan property as a boutique luxury four-star managed by Viceroy Hotel Group.}

The upscale property will be part of the Urban Retreat Collection. Designed by famous architect Enrique Norten of TEN Arquitectos and CetraRuddy, the hotel features a distinctive lobby leading to an impressive catwalk suspended over the restaurant. The property has 165 luxury rooms and suites including studios and deluxe rooms as well as junior and executive suites. Irene Mamiye's impressionist photography can be found in each room. The elegant bathrooms offer limestone and sleek fixtures and Frette linens for the ultimate guest experience.

Viceroy Hotel Group (known for its culinary heritage) will partner with the innovative BLT American Brasserie at the hotel. The new restaurant by renowned Chef Laurent Tourondel will feature a classic American menu.

Located a block from Times Square, Cassa occupies a prime location to attract business and leisure travelers – and an excellent opportunity for HNA. Meanwhile, the 57 luxury Cassa residences are still owned by Assa Properties.

January 31 ~ Built in 1906, the landmark Knickerbocker Hotel at 6 Times Square was sold by Walton Street Capital LLC (opportunity fund), Ashkenazy Acquisitions Corporation (private operating company) and Crown Acquisitions (private REIT) to FelCor Lodging Trust Inc (public REIT) and Highgate Holdings LLC (private operating company) for $230,000,000 ($696,970 per room).

FelCor (owner of 76 U.S. hotels) and Highgate Holdings created a 95%/5% joint venture. The midtown Manhattan property is divided into three sections – one hotel and two retail parts. FelCor/Highgate JV bought the hotel condo (the top 14 floors) for $115 million. The property's first two stories (occupied mostly by a Gap) are still owned by the investment group that sold the hotel to FelCor.

FelCor bought a 95% stake for $109 million. Highgate (hotel managers) has a 5% stake. With this purchase, FelCor becomes the proud owner of three NYC hotels. In 2011, the public REIT bought two of the city's trendiest properties – the Royalton and Morgans Hotels for $140 million.

FelCor is one of several hotel companies hoping to take advantage of New York City's strong tourism industry. According to Smith Travel Research, New York has an average hotel occupancy of 77% and the average rate of $198.48 last year far exceeded the national average of 60.1% and $61.06. In fact, Manhattan hotels are thriving despite a flood of new competitors in the marketplace. Lodging Econometrics announced that Manhattan's supply of rooms rose by 7.5% in 2010 and 2% in 2011 to over 77,000 rooms. The research company expects more increases of 2.8% during 2012 and 2013.

The current joint venture of Felcor and Highgate Holdings plans to spend another $115 million to change the Beaux Arts building at 42nd Street and Broadway back into a luxury hotel by late 2013. In recent years, the property has served as an office building. Redevelopment will be funded by a construction loan. The redevelopment strategy has been approved by New York City's Landmarks Commission as well as New York City's Board of Standards and Appeals. 

Hotel renovations extend to restaurants, rooftop bar, meeting rooms, a fitness center, and 400 square feet guest rooms. In the immediate future, FelCor plans to operate the property as an independent hotel under the Knickerbocker name. Although the NYC hotel industry is a competitive industry, the Knickerbocker's location is one of the best in the city.

According to John Fox, senior vice president in New York for PKF Consulting USA LLC, a company that tracks the lodging industry, "You don't get a better location. That's the center of the universe to a lot of people—42nd Street in Times Square. There probably isn't a better location to do a hotel in New York."

January 31 ~ The 259-room luxury Ritz-Carlton at 50 Central Park South has been sold to Westbrook Partners (private operating company) by Millennium Partners (private operating company who own other Ritz-Carlton properties in New York, Washington, and Boston). The $105,000,000 sales tag means an average price of $405,405 per room. The Ritz-Carlton (the former St. Moritz Hotel) includes several separately owned condos (the Residences at Ritz-Carlton) taking up 12 stories and 80,457 square feet of the 33-story, 324,293 square-foot building. The Ritz-Carlton (as well as other NYC hotels) is one of the world's most sought-after properties.

January 31 ~ Situated at 52-54 West 36th Street, the 185-room Hyatt Place New York Midtown South was purchased by Chesapeake Lodging Trust (public REIT) from McSam Hotel Group (private operating company) for $76,500,000 ($413,514 per room). Closing for the take-out deal is expected after the completion of the hotel (possibly in the third quarter of this year) and satisfaction of usual closing regulations. As well as the planned purchase, the Trust will provide the seller with $6.5 million in bridge financing to finish the hotel. The Trust plans to create a management plan with Real Hospitality Group, the operator of the Trust’s other NYC hotel on 31st Street in Midtown.

Upon completion, the Hyatt Place New York Midtown South will offer the ultimate in décor and comfort to business and leisure guests in the dynamic Midtown. Each room will have a central HVAC system and updated bathrooms with glass-enclosed showers and granite vanity tops. All guest rooms will feature a 42” high definition flat panel television, luxurious Hyatt Grand Bed, state-of-the-art media and work center, as well as a refrigerator, wardrobe, and comfortable seating areas. The hotel will have 27 double-bedded rooms, 158 king-bedded rooms, and four king-bedded rooms on the top floor with access to adjacent private terraces.

The relaxing and casual hotel lobby Gallery is a contemporary area providing distinct architecture and unique furnishings. The Gallery has a check-in kiosk, cozy Bakery Café (offering fresh snacks, tasty entrees, and specialty coffee drinks, as well as a full wine and cocktail bar) and a TV den with gathering spaces and an e-room with complimentary computer and internet access and printing.

An amazing optimism abounds in the New York City hospitality industry. Recently, Mayor Michael R. Bloomberg and NYC & Company (New York City’s official marketing and tourism organization) announced that the Big Apple welcomed a record-breaking 50.5 million visitors in 2011– a figure even higher than the original projections of 50.2 million. Even in the midst of winter, the unusually favorable temperatures last December and at present in February are encouraging tourists to come to New York City – the city with the highest tourism spending.

Even in the US, New York City is the number one metropolitan tourist destination. Hotel occupancy rates rose to 85% by the end of December 2011. Of course, business travelers are always on the move in New York City. All guests (leisure and business) can look forward to finding sensational deals in NYC hotels during January and February.

The following quote by Nicholas Clayton of Viceroy Hotel Group is just one example of the widespread optimism about NYC hotels in 2012.

The Jumeirah Essex House, the art deco hotel at the edge of Central Park, is on the market. The owners, Dubai Investment Group, part of a larger investment company (Dubai Group), "appointed advisers to explore opportunities" for the luxury building. In September 2005, the subsidiary of the Dubai Holding firm controlled by Sheik Mohammed bin Rashid Al Maktoum (the emirate's ruler), purchased the 44-story upscale property. A sister company, Dubai Holding's Jumeirah Group hotel division, managed the hotel since the acquisition.

Dubai Holding, one of three major holding companies in the Gulf emirate, has expanded quickly but incurred huge debts in the midst of an uncertain world economy. The emirate and its state-linked companies have a debt of $100 billion. Within the last two years, Dubai Holding divisions have sold off several assets in an effort to manage their high debt load.

Dubai Group, the Essex House owner, has spent over a year attempting to convince its lenders about new terms for their $10 million debt. As of yet, the parties have not reached an agreement. In 1931, Essex House opened between Sixth and Seventh Avenues at the southern end of Central Park. The Manhattan hotel has been a landmark for decades. Fadel al-Ali, Dubai Group's acting CEO, explains that the company is always reviewing its portfolio in case the market is right for their particular assets.

February 12 ~ InterContinental Hotels Group boss Richard Solomons is planning the sale of the New York Barclay hotel (a NYC landmark built in 1926 with support from the Vanderbilt family). This interesting move could free up $250 million cash for investors – possibly via a share buyback. IHG will release further information about this deal. A profit of $540 million is expected from IHG's 4,500 hotels worldwide including the Holiday Inn and Crowne Plaza brands.

Domain Properties represents hotel portfolios for sellers and buyers of OFF-MARKET properties including operating hotels as well as hotel development sites and hotel conversion sites - luxury hotels, trophy hotels, upscale hotels, select hotels, and boutique hotels in New York City and beyond. Domain Properties continues to represent private investment entities, pension funds, REITs, hotel management companies, asset management firms, and sovereign funds in search of equity rich quality hotel properties in New York City.

For complete OFF-MARKET listings of NYC hotels for sale or to have Domain Properties represent your hotel portfolio, visit ^{www.Domain-Properties.com. For a complimentary valuation of your hotel, email Hotels@Domain-Properties.com or call 212-741-9700.}