A 478-room hotel near the center of New York City’s Times Square is poised to reopen under new ownership after closing two years ago, the latest sign that investors are betting on the neighborhood’s return.
Investment firm Apollo Global Management Inc. and hospitality investor Newbond Holdings have agreed to buy Hilton Times Square for approximately $85 million, according to people familiar with the matter. The deal is expected to close at the end of the summer, and the new owners plan to reopen the property in the fall, these people said.
The recent sale agreement represents a significant discount to the hotel’s 2006 sale price of $242.5 million. This year’s price reflects both the tough times New York’s entertainment district is facing during the pandemic and some of the issues with this property.
The hotel was closed in April 2020 and has not reopened since, making it one of the more high-profile victims of the collapse in New York City’s tourism. Previous owner Sunstone Hotel Investors Inc. defaulted on the loan for the hotel and handed over the property to the lender, Torchlight Investors, in late 2020.
New York City’s hotels with more than 10,500 rooms closed permanently due to the pandemic, the most of any US city, according to hotel-data tracker STR. Business travel and a slow return in international visitors have affected the city’s hospitality sector.
But lately there have been signs of life in Times Square getting disturbed. Investors and developers are banking even more on tourism and entertainment venues, while district offices are mostly empty during the day. Attendance on Broadway shows is closing in on pandemic levels and some hotels are refilling.
A Hard Rock International-branded hotel opened on West 48th Street in April, and last year a Jimmy Buffett-themed Margaritaville resort hotel with an outdoor swimming pool was opened in Times Square. Real estate investors are also swooning when the price is right. Hotel owner and operator MCR and Island Capital Group LLC recently paid $373 million for the Sheraton New York Times Square Hotel, nearly half of the property sold in 2006.
Hoteliers have been encouraged by recent forecasts that the city’s tourism is in a strong recovery mode. NYC & Company, a tourism and marketing organization for the city, projects that visitors to the Big Apple will exceed 56 million in 2022, up from about 22 million in 2020, according to its website. The group sees that figure jump to 65 million next year as more international visitors return, bringing the total within striking distance of 2019 levels.
People familiar with the matter say the Hilton Times Square sits on a land lease that is being refurbished and expanded under the new owners. Apollo and Newbond, a firm co-founded by hotel veteran Neil Luthra, also plan to invest in improvements to the rooms and lobbies.
Located on 42nd Street, the hotel is known for unobstructed views of the city. Its lobby is located on the 15th floor and the rooms rise to the 44th floor.
This story has been published without modification to the text from a wire agency feed