NEW YORK CITY — Continuing the trend of public money purchasing high-profile hotel assets in major markets, LaSalle Hotel Properties (NYSE: LHO) has signed a purchase and sale agreement to acquire The Park Central Hotel in New York City for $405.5 million, just over $434,000 per key.
The 934-room, urban, full service hotel is located at 870 Seventh Avenue, between West 55th and West 56th Streets, in midtown Manhattan.
Originally built in 1928, The Park Central Hotel has undergone more than $33 million of capital improvements since 2004, and LaSalle plans to implement further renovation of the hotel, currently estimated to cost between $30 and $35 million. The updates will include guestrooms and guest bathrooms, corridors and the lobby. The company expects the renovation to begin during 2012. Highgate Holdings, which currently manages the Park Central, will remain in that capacity.
The acquisition is subject to completion of due diligence as well as customary closing requirements and conditions, and is expected to close toward the end of the third quarter 2011. LaSalle anticipates funding the majority of the purchase price with net proceeds of approximately $216.6 million from its previously completed sale of common shares on April 26, 2011, and property level financing.
The hotel features two food and beverage outlets, including Cityhouse, an 88-seat steakhouse, as well as Bar Bella, a 50-seat lobby lounge that serves drinks and light fare. The Park Central Hotel features more than 14,000 square feet of flexible meeting and function space, including a 8,500 square foot Grand Ballroom. Additionally, the Park Central includes 4,800 square feet of retail space.
“The asset features an excellent location within New York City and benefits from numerous corporate and leisure demand drivers,” said Michael D. Barnello, president and chief executive officer of LaSalle Hotel Properties.
The Park Central Hotel is situated across the street from Carnegie Hall, three blocks south of Columbus Circle and Central Park, five blocks from Rockefeller Center and Radio City Music Hall, as well as just seven blocks north of Times Square and the theatre district.
LaSalle currently owns 35 upscale full-service hotels with more than 8,700 guest rooms, located in 13 markets in 9 states and the District of Columbia. The REIT’s main focus is on owning, redeveloping and repositioning upscale full-service hotels located in urban, resort and convention markets.
— Dan Marcec