GFI, Elliott Strike Deal for Parker Hotel in NY
A joint venture between GFI Capital and Elliott Management has agreed to pay just over $400 million to acquire the Parker New York Hotel in Midtown Manhattan.
The duo is pursuing a value-added strategy for the 729-room property, which needs an upgrade and has flexibility because it isn’t subject to brand or management contracts.
Newmark is brokering the sale for New York-based Jack Parker Corp., which is unwinding its real estate holdings. The family-controlled shop, whose eponymous founder died in 2007, owns a mix of residences, offices and hotels, mostly in New York.
The company shopped the Parker in 2016, when it was operated as Le Parker Meridien, but never reached a deal. At the time, New York was absorbing heavy new supply that dampened revenues and, consequently, investor demand.
But the timing was right this time around. Revenues at Manhattan hotels climbed 5.5% year-over-year in the first half, according to STR. And construction has slowed. Those factors have made high-yield investors more bullish about the long-term prospects for New York hotels.
The Parker, at 199 West 56th Street, has seen its performance decline since losing the Meridien flag in January. GFI and Elliott will conduct a renovation, take control of management and devise a strategy to boost revenues.
New York-based GFI has a track record of owning and operating high-end, unbranded hotels in New York. Its portfolio includes the Ace New York, the James Hotel and the Beekman.
The 40-story Parker hotel, which is between Sixth and Seventh Avenues, boasts views of Central Park, a few blocks north. An underground retail corridor that opened in 2012 includes restaurants, salons, a gym and a spa. The hotel has a three-story atrium lobby and a rooftop pool.
The property was part of a $1.5 billion portfolio that Jack Parker listed with Newmark in March. That package also included apartment buildings, office buildings and another hotel. The company has struck at least one other sales agreement — New York investors GreenOak Real Estate and Slate Property will pay about $290 million for the 464-unit Biltmore apartment building, at 271 West 47th Street in Manhattan.