The city's red hot hotel market looks set to continue the New Year at break-neck pace with two deals already underway for prime properties.
Luxury hotel Swissotel The Drake will enter the second round of bidding next week and according to a source familiar with the sale, could grab as much as $500 psf for owner Host Marriott, who is the biggest hotel REIT in the country.
Eastdil's Doug Harmon is handling the sale, but did not return calls seeking comment. While a number of hotel operators are bidding, according to the source, a handful of unnamed commercial developers have been most aggressive with their bids, a fact that seems to cement speculation the building may be heading for the wrecking ball or at the very least, a significant overhaul.
Despite the resurgence in the hotel industry, The Drake will likely be converted into condos or razed to make way for an entirely new residential building.
And luxury condo developers, Izak Senbahar and Simon Elias, may have conversion plans for The Mark Hotel, for which they just paid Mandarin Oriental International $150 million.
Senbahar and Elias--whose long list of high profile developments include the Richard Meyers designed 155 Charles Street--just closed on the deal for the 176-room hotel at 25 East 77th Street on the corner of Madison Avenue.
Over the years, the partner's portfolio has included some of New York's most prestigious properties, such as 353 Central Park West, The Elektra, The Madison Towers Hotel and The Hotel Pennsylvania.
Mandarin--a unit of one of Asia's oldest trading groups--bought The Mark in 2000 as part of a $142.5 million acquisition of The Rafael Group. The company said its post tax gain on the sale of its 100% leasehold interest in the hotel will be about $35 million.
"The market conditions surrounding the sale of this property are extremely positive and the funds generated will be used to further the group's growth strategy," said Mandarin Group's chief executive, Edouard Ettedgui, in a statement.
The sale leaves the company with one hotel in New York--the Mandarin Oriental in the Time Warner Center, which it opened in 2003.

Written by: No Author