The New Yorker

Jared Kelso | (212) 841-9205 | jared.kelso@cushwake.com  

Gideon Gil | (212) 841-9231 | gideon.gil@cushwake.com  

Steve Michels | (212) 841-7782  | stephen.michels@cushwake.com

Steven Vazquez | (212) 698-5562 | steven.vazquez@cushwake.com  

Daniel Donovan | (212) 589-5104 | Daniel.donovan@cushwake.com 

Jacob Frisch | (212) 841-9205 | jacob.frisch@cushwake.com 

THE NEW YORKER – FINANCING OPPORTUNITY

Cushman & Wakefield has been retained by Ownership to arrange $125.0 million (50% LTV) of cash-neutral refinancing proceeds for the iconic New Yorker (the “Property” or “Asset”). Proceeds will be used to retire the existing senior loan, cover closing costs and fund reserves.

Originally opened in 1930, the historic New Yorker is located at 481 8th Avenue between 34th and 35th Streets, a dynamic location in the heart of NYC's Penn District. The 42-story Property totals over 1.0 million square feet of irreplaceable real estate featuring premier frontage across a full city block on 8th Avenue. The building is comprised of:

• 1,050 hotel guest rooms
• 33,000 square feet of premium meeting and event space
• 16,700 square feet of retail space leased out across three Food & Beverage venues
• 113,000 square feet of office space; and
• 142,000 square feet of student housing totaling 579 beds

Centrally located in the Manhattan’s Midtown neighborhood, the New Yorker is immediately across the street from Penn Station, MSG, and Moynihan Train Hall, and proximate to all of Midtown’s major corporate and leisure destinations including Hudson Yards, Times Square, the Empire State Building, Port Authority, Grand Central Station, Herald Square, the Theatre District,  Manhattan West, and the recently renovated Jacob Javits Center, the single largest source of group business for Manhattan.

The New Yorker offers the opportunity to provide attractive, cash-neutral financing for an institutional quality, historic hotel with proven cash-flow and unmatched brand recognition. At 50% loan-to-value and a $120,000 per key basis on requested proceeds, the financing represents a well-secured position for an institutional quality hotel in New York City’s high barrier to entry Midtown South neighborhood. 

FINANCING HIGHLIGHTS

• Attractive basis: A loan basis of $120,000 per key or $115 psf is significantly below replacement cost and well below NYC hotel sale transactions.
• Irreplaceable Real Estate: Opened in 1930, the famed Property totals over 1.0 million square feet of irreplaceable real estate towering 42 stories in the heart of NYC’s Penn District. There is significant value in the asset’s underlying land and brick & mortar.
• Strong Branding: The New Yorker name and famed building signage have been part of the New York skyline for decades, and as a result, have significant brand equity and unmatched recognition in the NYC lodging market.
• Diverse Revenue Stream: In addition to hotel income, the Property features a diverse revenue stream generated by retail, office and student housing lease income.
• Capital Improvements: The Property has been extremely well-maintained, having received over $100 million ($100,00 per key) in capital improvements over the last 15 years, including a comprehensive conversion of the HVAC system from a 2-pipe to a 4-pipe system and an elevator modernization project that is currently being implemented.
• Record Breaking Market Performance: New York City’s lodging market achieved its best Q4 performance on record with RevPAR of $279.67, up 6.7% from the previous high in 2014.The 2022 year-end RevPAR increase of 69% relative to 2021 is more than double the national average of 30.6%, highlighting yet again the resiliency of the NYC lodging market relative to other US cities.
• Significant Inventory Compression: Numerous competitive hotels in the immediate area, including the 1,711-room Hotel Pennsylvania and the 1,013-room Roosevelt, have recently permanently closed, and the 1,331-room Row and the 605-room Stewart Hotel currently in the competitive set have been fully contracted to house migrants/homeless in 2023, positioning the New Yorker to capitalize on the significant amount of displaced corporate and leisure travel.
• Major West Side Developments Highlighting Future Growth: A number of major new developments are being delivered in the immediate submarket in the near future: Vornado’s 20 million SF, $7 billon Penn District development directly adjacent to the Property, the completion of Manhattan West, the delivery of Hudson Yards $25 billion final project phase, Boston Properties and Moinian Group’s 3 Hudson Boulevard, and Chetrit Group’s 545 West 37th St mixed-use development.
• Strong Sponsorship: The financing opportunity is supported by a strong corporate sponsor that has owned the Property for over 45 years. In that time, they have implemented numerous capital improvements and strategic repositioning projects that have improved asset value considerably