Hilton Times Square hotel, which has been closed for more than two years, is set to reopen its door this fall after changing ownership, according to WSJ.
The hotel was sold for $242.5 million back in 2006, but the owner fell behind in payments and handed the keys back to the lender. The new owner bought it for $85 million, representing a 65% discount on the previous price.
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Here’s an excerpt from the WSJ:
A 478-room hotel near the heart 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 comeback.
The investment firm Apollo Global Management Inc. and hospitality investor Newbond Holdings have agreed to buy the Hilton Times Square for about $85 million, according to people familiar with the matter. The deal is expected to close toward the end of the summer, and the new owners plan to reopen the property in the fall, these people said.
The recent sales agreement represents a significant discount to the hotel’s 2006 sale price of $242.5 million.
The hotel was shut down in April 2020 and hasn’t reopened since, making it one of the more high-profile victims of the collapse in New York City tourism. Previous owner Sunstone Hotel Investors Inc. defaulted on a loan for the hotel and handed the property over to the lender, Torchlight Investors, in late 2020.
Some of these hotels were sold and traded at exceptionally high values just before the pandemic began, and some still are.
When you finance these deals mostly on debt, the lender is actually taking most of the risk. The owner perhaps had an “option” value in the case that everything would run perfectly.
I guess that it is up to the new owners if they decide to continue the hotel’s affiliation with Hilton. It is long gone from the branded website.