The Royalton Hotel in Midtown has been sold at a loss for the second time in nearly a decade, according to city property records.
Real estate private-equity firm the Rockpoint Group sold the property at 44 W. 44th St. last week to MCR Development, the country’s fifth-largest hotel owner and operator, for $41 million—down $14 million from the original price.
Rockpoint and MCR did not respond to requests for comment.
In 2017 Texas-based Rockpoint, in a joint venture with Highgate, purchased the Midtown hotel for $55 million from hotel REIT, FelCor Lodging Trust. Rockpoint secured a $36 million mortgage to seal the deal, although its reign over the property was short-lived.
Six years earlier FelCor purchased the property for $88 million from the Morgan Hotel Group, which was owned by hotelier Ian Schrager. Morgan used the proceeds from the sale to pay off its debts on the property.
The 168-room inn underwent a massive $20 million renovation in 2007; the hotel’s lobby, bar and dining areas were revamped, and several guest rooms were converted into penthouses.
Rockpoint’s other properties in the city include Soho House, 1 Dag Hammarskjold Plaza and other multifamily properties. MCR also owns three hotels in the city, aside from its newest acquisition: the High Line Hotel, the New Yorker Hotel and Ink 48.
Ashford Hospitality Trust’s Embassy Suites by Hilton hotel in Midtown also sold at a steep 41% discount—$115 million compared with the $195 million it paid for it last year—to an affiliate of the Magna Hospitality Group.
The pandemic's effects on the city's tourism industry has squeezed hotels to their limits. Dangerously low occupancy rates during the height of the pandemic left many hotels closed, workers furloughed and mortgages delinquent. The Hotel Association of New York City doesn't expect the industry to regain its momentum for several years.
Nearly $1.5 billion in mortgage-backed loans have gone unpaid in Greater New York, Crain's reported, although some hotels have begun to reopen as the summer comes to a close. The Royalton is closed to guests but expects to open its doors Sept. 30, according to its website.
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September 09, 2020 at 11:29PM
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Royalton Hotel sells at a loss for the second time in a decade - Crain's New York Business
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