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Real Estate Weekly

City hotel sales top $232m

City hotel sales top $232m

Elaine Misonzhnik

New York hotels continue to be a hot commodity in the sales market with two major deals being inked this week.

The Blackstone Group recently confirmed that it has closed on the acquisition of the Rihga Royal, a 500-suite luxury hotel in the heart of midtown, reportedly for $180 million.

And, Alchemy Properties paid $52.25 million for the Sutton East Hotel at 330. E. 56th Street.

According to the Blackstone Group spokesman, John Ford, the company has every intention of keeping the property as a hotel and will even invest additional capital in renovations.

“We have a long history of investing in hotel properties around the world and this was in an area we know particularly well,” Ford said. “We will absolutely keep it as a hotel and we will be spending a considerable amount of money on renovations.” Blackstone wouldn’t disclose the price of the transaction, but according to published reports it’s in the $180 million range.

Located at 151 W. 54th St., between Sixth and Seventh Avenues, the Rihga Royal is considered one of the swankiest hotels in Manhattan. The 54-story art deco building has undergone a renovation in 2002. It was constructed in 1990.

Meanwhile, Alchemy Properties is intent on taking advantage of the city’s conversion boom. The firm confirmed that it will convert the Sutton East Hotel into condominiums by fall of this year.

According to Joel Breitkopf, partner, Alchemy was attracted to the hotel because of its midtown setting and its layout, as well as the fact that it already had a residential certificate of occupancy, making a conversion much easier.

“We thought it’s a wonderfully located and renovated jewel of a property,” Breitkopf said. “One of the things we liked about the building is that it has a Fifth Avenue feel when you walk into the lobby and the common areas. And based on the way it was built, it’s a [perfect candidate] for condo conversion.”

Alchemy Properties bought the hotel from Glenwood Management.

Rumors that the Essex House, a luxury hotel at 160 Central Park South, has been sold to Fairmont Hotels and Host Marriott for $400 million were quashed this week.

The landmark Essex features 501 rooms overlooking Central Park. However, owners, Starwood Hotels & Resorts, told REW that, for now at least, the hotel still belongs to Starwood. The building underwent a major renovation in 1991.

COPYRIGHT 2005 Hagedorn Publication

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