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Chelsea Holiday Inn sells at huge loss

The firm has been exploring a sale since at least January, according to Trepp, and it hoped to have the buyer assume its $72 million loan on the property, which was transferred to special servicing at the beginning of last year. 

The pandemic has been devastating for the city’s hospitality industry, and this is just the latest in a string of recent Manhattan hotels that have sold at steep discounts. RLJ Lodging Trust sold the DoubleTree by Hilton at 569 Lexington Ave. to Hawkins Way Capital for $146 million after buying it in 2010 for about $332 million, while DiamondRock Hospitality sold the Lexington Hotel at 511 Lexington Ave. to C-III Capital Partners for about $175 million after buying it in 2011 for about $335 million.

A representative for Watermark declined to comment, and Two Kings did not immediately respond to a request for comment.

A report from CBRE was optimistic about the future of New York hotels, predicting that annual occupancy should reach 77.2% in 2023 and 82% by 2024 and citing the return of tourists and executives on business travel to the city. But Vijay Dandapani, president and CEO of the Hotel Association of New York City, strongly pushed back on these predictions and said it was very inaccurate to predict a recovery for the city’s hotel industry coming soon.

The value of New York’s hotel properties has fallen by 19.6% since before the pandemic, dropping from $32.7 billion to $26.3 billion, according to Mayor Eric Adams’ preliminary budget.

This story has been updated to reflect that Watermark declined to comment on the deal.