(Corrected on Feb. 14 to clarify the seller in the deal and updated to include the sales price.)
Beverly Hills-based Hawkins Way Capital has acquired the former New York Marriott East Side through a joint venture with Värde Partners.
The property, built in 1924 as the Shelton Towers Hotel, is 35 stories tall with 655 rooms and 406,261 square feet, according to the news release. Located at 525 Lexington Avenue in Midtown, Manhattan, the hotel closed at the beginning of the pandemic in 2020.
The buyers did not disclose the price of the deal, but CoStar data reports the property sold for $154 million. The property last sold in May 2015 for $270 million. Prior to that, it sold in November 2005 for $287 million.
CoStar data reports the seller was Deka Immobilien. Ashkenazy Acquisition Corp. previously held a 15% minority interest in the hotel, but it sold its share to Deka at a $265 million valuation at least a year before the most recent deal, according to an Ashkenazy spokesperson.
The property represents a compelling opportunity to increase Hawkins Way Capital’s footprint in the heart of Manhattan at a favorable basis, said Ross Walker, Hawkins Way Capital's co-founder and managing partner, in the release.
“We believe the property will benefit from an injection of fresh equity and perspective to help weather economic and financial market headwinds and remain bullish on long-term growth and a sustained recovery of the New York market in general," he said. "We look forward to continuing to structure viable exit opportunities for existing landlords and grow our presence on the East Coast."
The former Marriott hotel is Hawkins Way Capital’s ninth acquisition in 15 months. It has added more than 3,500 new units to its portfolio through more than $1.3 billion in investment. The company intends to integrate the property into its nationwide network of more than 5,700 units and 9,500 beds managed by Hawkins Way Capital’s affiliated property management company.
Hawkins Way Capital manages equity funds for select family offices and institutions. It has $2.5 billion of assets under management. Värde Partners is a global alternative investment firm that has invested $85 billion since its start in 1993 and manages approximately $14 billion for its investor base.