By JACK ROGERS
May 2, 2023 6:46 AM
Capstone Equities has acquired Life Hotel, a shuttered building that is the third distressed property the company has acquired in Manhattan since the beginning of last year.
Capstone grabbed Life Hotel, a 98-room hotel at 19 West 31st Street in a foreclosure sale after the owner defaulted on a loan backed by the property, TheRealDeal reported.
Capstone bought Deutsche Bank’s $47M loan on the hotel and acquired the property in a UCC foreclosure.
Capstone is planning to reopen the boutique hotel under its in-house management brand, Rebel Hospitality. The previous owner, investor David Mitchell, had purchased the hotel for $41M in 2015 and invested $70M in renovating the facility.
In January of 2022, Capstone took control of the 172-room Renwick Hotel at 118 East 40th Street after buying its $46M non-performing loan at a “substantial discount,” TRD reported.
Out a dozen up-market Manhattan hotels that closed after Jan. 1, 2020, only three have firm plans to reopen, according to an analysis prepared for CBRE by Lodging Econometrics.
These include the uptown Four Seasons, the former Roger on Madison Avenue (to reopen in May as AKA Nomad), and the Surrey on East 76th Street, rebranded as Surrey, a Corinthia Hotel.
Manhattan hotels that have permanently shuttered include the AKA Wall Street, Marriott East Side, the Roosevelt and the Hudson. The list doesn’t include the Waldorf-Astoria, under construction since 2017 and not expected to open before 2025 or the Pennsylvania, which has been demolished.
According to a recent report in the NY Post, NYC is projecting it will have 61 million visitors this year compared to 56 million in 2022, approaching the record 66 million in 2019.
The report said there been a jump in visitors from China, typically the biggest spenders on luxury goods, restaurants and entertainment, since the country’s borders reopened.
Hotel occupancy in 2022 was 75%, still below the pre-COVID average of 86% but a huge improvement over 2021.
Vijay Dandapani, CEO of the Hotels Association of New York City (HANYC), told the post the upbeat numbers are misleading. Overall, he said, NYC currently has about 118,000 open hotel rooms, down from 126,000 pre-pandemic—despite the addition of 6,000 newly constructed rooms in the past two years.
Dandapani noted that nearly 9,000 rooms listed as “open” by the city are being used to house migrants who are still flowing into New York City.
According to PwC’s Manhattan Lodging Index, RevPAR increased in the fourth quarter of 2022 year-over-year by 54%.