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October 19, 2016  

High-End Midtown Manhattan Hotel on Block

Jack Parker Corp. is talking to potential buyers of Le Parker Meridien, a Midtown Manhattan hotel valued at roughly $500 million.

The New York development firm has been showing the 729-room, upper-upscale hotel to a select group of bidders via Eastdil Secured. The buzz is that New York investor Steven Witkoff, who leads Witkoff Group, is among those taking a look.

The property is being offered unencumbered by a management contract. The offering is a rare opportunity to buy a high-end hotel in a prime location and potentially change the flag. The 40-story building, at 199 West 56th Street between Sixth and Seventh Avenues, boasts views of Central Park a few blocks to the north.

New York-based Jack Parker developed the hotel, which opened in 1981 and has been part of the Meridien line ever since. The brand operator, Starwood Hotels & Resorts of Stamford, Conn., was acquired last month by Marriott International of Bethesda, Md., in a $13 billion deal.

The property has an underground retail corridor, opened in 2012, that includes restaurants, salons, a gym and a spa. There is a three-story atrium lobby and a rooftop pool.

Financials for the property were unavailable. But comparable upper-upscale hotels in the Midtown West/Times Square submarket were 88.3% occupied on average during the first eight months of the year, flat from the same period last year, according to STR. Room rates averaged $268.23, down by 4.6% from last year. That translated into a 4.3% drop in revenue per room, to $236.72.

Manhattan hotel sales have slowed following last year’s record volume. That reflects a decline in activity across the sector, as well as substantial hotel development in the city, which has caused a dip in revenues.