Joint venture marks the second high-profile hotel transaction between Island Capital and MCR and demonstrates continued optimism in the recovery of New York City’s hospitality industry
NEW YORK, April 19, 2022 — MCR, a leading hotel investor and the third largest hotel owner-operator in the United States, and Island Capital Group LLC (“Island Capital”), a leading international real estate merchant bank that controls a diverse group of real estate services companies engaged in fund management, principal investment, and financial advisory and consulting services, today announced that they have jointly acquired the Sheraton New York Times Square Hotel, an iconic 1,780-room hotel in the heart of midtown Manhattan and the unofficial Gateway to Times Square, for $373 million. The purchase price equates to $210,000 per guestroom, which is one of the lowest prices per guestroom paid for fee simple hotel real estate in Manhattan over the past 13 years.
The Sheraton New York Times Square Hotel, located on Seventh Avenue between West 52nd and West 53rd Streets just seven blocks north of Times Square, is the third-largest hotel in New York City by room count. The property opened in 1962 as the Americana and became part of the Sheraton hotel brand in 1979. With 62,000 square feet of event space, it has hosted many of the City’s most coveted events and most recently hosted the New York Democratic Convention.
The acquisition of the Sheraton New York Times Square Hotel follows Island Capital’s and MCR’s successful joint venture acquisition of The Lexington Hotel, Autograph Collection, a historic 725-room hotel located on the corner of Lexington Avenue and East 48th Street in the heart of Midtown Manhattan. Between The Lexington Hotel and the Sheraton New York Times Square, Island Capital and MCR have acquired more than 2,500 guestrooms in New York City together. On a standalone basis, MCR operates more than 5,000 rooms in the New York City area, which includes properties such as The TWA Hotel at JFK Airport, The High Line Hotel, Royalton New York, Ink48 Hotel and The New Yorker.
“The Sheraton New York Times Square Hotel is a landmark property that we are committed to enhancing and modernizing over the coming months to make it a go-to destination when traveling for business or pleasure,” said Andrew L. Farkas, Chief Executive Officer of Island Capital. “We are excited to continue building our lodging and hospitality footprint in New York City alongside MCR, and we are confident that the City’s hospitality industry will continue to bounce back.”
“We are delighted to be working with Marriott to position The Sheraton New York Times Square Hotel as one of New York City’s premier destinations and one of the flagship hotels for the Sheraton brand in the United States and globally,” said Tyler Morse, Chairman and Chief Executive Officer of MCR. “The Sheraton New York Times Square Hotel is the gateway to Times Square and a New York City icon. We believe in investing in New York, and we are proud to have kept our eight New York City area hotels open and the teams employed over the past two years. New York is open for business!”
The Sheraton New York Times Square Hotel will remain part of the Sheraton brand family under a new long-term franchise agreement and will be managed by MCR. Island Capital and MCR intend to invest more than $100 million in the hotel’s rooms, banquet areas and public spaces.
About Island Capital
Island Capital Group LLC is a merchant bank headquartered in New York City with synergistic investing and advisory platforms specializing in real estate transactions. The company provides turnaround, restructuring, capital raising and other advisory services, with over 30 years of expertise in creating value across more than $250 billion of transactions. Island Capital has a diverse platform of commercial real estate services, from fund management to financial advisory and consulting. The platform includes C-III Capital Partners LLC, NAI Global, Island Global Yachting and The Planning & Zoning Resource Company LLC. The company is led by Andrew Farkas as CEO and is headquartered in New York, NY. For more information about Island Capital, please visit www.islandcapital.com.
Prosek Partners (on behalf of Island Capital)
ICR (on behalf of MCR)