NEW YORK – (BUSINESS WIRE) – Marcus & Millichap (NYSE: MMI), a leading commercial real estate firm specializing in investment sales, finance, research and consulting, announced the sale of Martinique New York on Broadway, a 531-room landmark hotel on the corner of 32nd Street and Broadway in Manhattan. The asset was purchased for $ 55.5 million with an estimated total development cost of $ 110 million.
“Our team has worked tirelessly over the past 12 months to overcome several obstacles during the sales process,” said Eric Anton of Marcus & Millichap’s Manhattan office. “We are very proud to be a part of what will be an incredible revitalization project for one of New York’s oldest operating hotels. The COVID-19 pandemic originally created the hospitality industry in New York City, prompting countless established hotels and retail properties to close the store, including Martinique New York, which filed for bankruptcy in 2020. ”
In December 2020, Marcus & Millichap’s Anton, Nelson Lee and their team were hired by the hotel’s owners, Herald Hotel Associates, LP, a private, New York-based, family-run company to sell the property. Anton’s first order was to find a buyer for the hotel, and ultimately Burnett chose Equities based in Oklahoma City. Once the details of the lease had solidified, Anton and Lee turned their attention to creating value in the store space.
“Martinique corners two of Manhattan’s iconic streets, 32nd Street, at one end of the city’s expansive Koreatown neighborhood, and Broadway, home to some of the city’s most famous restaurants, eateries and hotels, ”said Anton.
Anton and Lee introduced Burnett Equities to local retail brokers, including one that specializes in renting Koreatown space and the other an expert in the restaurant and hospitality industry. In less than three months, the team secured leases for all six retail locations in the midst of the pandemic before closing the sale of the hotel.
During the marketing process, Anton Mission Capital used Debt & Equity, part of Marcus & Millichap Capital Corporation (MMCC). With the assistance of MMCC’s Matthew Polci, Steven Buchwald, Jordan Ray and Lexington Henn, Burnett Equities secured a $ 71 million mortgage and a more fundable base lease.
“Martinique New York had almost every major complexity imaginable for New York City funding, including a New York City-branded, unionized hotel subject to a ground lease coming out of construction, the COVID-19 lockdown and in bankruptcy, with a largely vacant retail component, ”Polci said.“ Despite these challenges, our borrower, their retail leasing team and our Marcus & Millichap sales brokers did a fantastic job of translating challenges into value creation opportunities. I was impressed with our capital market team, especially my team members, in their ability to effectively communicate the evolving benefits of this agreement to the debt markets and create a competitive market around such a complex transaction. ”
“With all the problems that COVID-19 caused, great opportunities arose for those who were willing to go far,” Lee said. “Our buyer was looking for opportunities to break into the New York market, but the right opportunity had not yet come to fruition. This rare opportunity to invest in a newly renovated, historic landmark was a special opportunity, and as prices fell and business was scarce, so our buyer the massive growth potential and future resurgence of the hospitality industry through the Martinique investment. ”
“Martinique’s historical value and prime location are what set it apart. Steps away from Herald Square and almost every subway train in the city, a five-minute walk from Grand Central, Martinique New York will be at the forefront of the hospitality industry for years to come, ”said Anton.
About Marcus & Millichap (NYSE: MMI)
With over 2,000 investment and finance investment professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial property investment sales, financing, research and consulting. The company was founded in 1971 and completed 8,954 transactions in 2020 worth approximately $ 43 billion. Marcus & Millichap has perfected a powerful real estate marketing system that combines investment specialization, local market expertise, the industry’s most comprehensive research, advanced technology and relationships with the largest pool of qualified investors. To learn more, please visit: www.MarcusMillichap.com.