If hotel executives weren’t convinced that the lodging industry is back and beating pre-recession levels, maybe this news coming out of New York will give them more proof.
The Wall Street Journal is reporting that the Standard Hotel, located in the city’s trendy Meatpacking district above the High Line park, is set to fetch a record price for its sale.
Final bidders, led by investor Steven Kantor, are expected to pay $400 million for the boutique asset, which is managed by Andre Balazs. That price translates to a whopping $1.2 million per room—the most paid for a U.S. hotel since the financial crisis.
Owners Dune Real Estate Partners and Greenfield Partners spent about $240 million on the hotel, its restaurants, and nightclub 10 years ago.
There’s no doubt that the transaction market is heating up. During the Americas Lodging Investment Summit, Suzanne Mellen, senior managing director of consulting and valuation at HVS, said that transaction volume for hotel properties reached $25 billion in 2013, with three U.S. deals coming in slightly over the $1-million-per-room mark.