Standard Hotel to fetch a postcrisis record
The Standard Hotel in Manhattan’s bustling Meatpacking district became famous a few years ago when some of its more brazen guests disrobed in front of its floor-to-ceiling windows.
Now the downtown hot spot is raising eyebrows for a different reason: a near-record sales price.
Final bidders include a group led by investor Steven Kantor. They and others are in negotiations to pay more than $400 million for the five-year-old property, say people familiar with the matter. The Standard, which is managed by hotelier Andre Balazs’s company, sits above the city’s elevated pedestrian park known as the HighLine and attracts a young and chic crowd.
The price would represent at least $1.2 million a room, these people said. That would be the highest paid for a U.S. hotel on that basis since the financial crisis, and the fourth highest ever, according to broker Jones Lang LaSalle.
Poised to profit are owners Dune Real Estate Partners and Greenfield Partners, which spent about $240 million on the hotel and its restaurants and nightclub beginning 10 years ago, according to a person with knowledge of the deal.
The hotel market is booming, fueled by rising room rates, more tourism and business travel, and demand from investors who are new to the business. While the volume of sales rose in all commercial real-estate sectors, the lodging industry logged the biggest increase in 2013.
The value of U.S. hotel transactions hit $22 billion last year, up 35% from 2012 and a nearly tenfold increase from the low point in 2009, says Jones Lang LaSalle.
That is still about half the money spent in the peak year of 2007. But a number of recent deals rank among the priciest ever. Manhattan’s Park Lane Hotel, Miami’s St. Regis Bal Harbour and the London West Hollywood each changed hands for around $1 million a room?often considered a watershed level that had been reached only about a dozen times previously in the U.S., according to Jones Lang LaSalle.
Those deals are helping drive the average sales price to new highs. In 2013, the average price per room for hotel sales of $10 million or more was $217,000, topping the $215,000 average in 2007, according to investment bank MLV & Co.
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