Manhattan Holiday Inn sells at huge loss in COVID trend
The coronavirus pandemic may be ebbing, but the hospitality industry still isn’t so hot.
In what has been an ongoing trend, another hotel – this time Chelsea’s Holiday Inn at 125 W. 26th St. – has sold out, albeit at a steep discount.
Two Kings Management paid owner Watermark Lodging Trust about $80.3 million for the budget accommodations – a far cry from the roughly $111 million Watermark paid for the address in 2013, fear is reported.
Not only did Watermark receive about $31 million less than it paid for the property nine years ago, but the Chicago-based real estate investment trust had invested an additional $8 million in renovations and improvements fixed assets in the full-service hotel. While at one point the 226-room inn’s value was in the rough $121 million range, the pandemic has done a lot to its valuation: According to an April analysis by the firm Treppthe hotel is now worth 30% less than before COVID-19.
A $72 million loan on the property hasn’t helped Watermark sell the property, something it’s been trying to do since at least January, according to Crain’s.
“Unfortunately for hotels and their employees, it is extremely misleading to suggest that the industry will rebound anytime soon,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City. at the publication about the future state of the scruffy, loan-ridden industry. “The only way for New York’s hospitality industry to fully recover is to reduce its tax burden so that debt can be reduced.”
Indeed, Manhattan hotel deals haven’t been hard to come by lately, with the Holiday Inn’s discounted price just the latest of many, including the sale of a Midtown DoubleTree at a loss of around $186 million and the sale of the Lexington Hotel at around $160. million losses.