725 Key Lexington Hotel NYC Sold US$185m to US JV

Main Photo: The Lexington Hotel NYC

Date: August 2021

Name: Lexington Hotel

Location: Midtown Manhattan, New York City, NY, USA

Number of Keys: 725

Seller: DiamondRock Hospitality

Buyer: A joint venture between Island Capital Group, the US-based real estate investment group, MCR Investors, the US-based hotel investment and management group, and Three Wall Capital, the US-based hospitality investment group, announced that it has acquired the 725-key Lexington Hotel in New York, NY for US$185 million. According to the announcement, following the transaction, the property will be operated by MCR under the Autograph Collection flag.

The sale price represents a cap rate of 5.4 percent based on the hotel’s 2019 net operating income. The Lexington Hotel features multiple meeting and event spaces. DiamondRock intends to invest the net proceeds from the sale in resort and urban lifestyle hotels.

Since 1929, The Lexington Hotel, Autograph Collection has welcomed global leaders, international celebrities, major business executives and famous sports icons. The current Starbucks entrance served as the gateway to the original hotel with crown molding that had sculptures of goddesses for each season.

Originally named Hotel Lexington, the East Side Midtown Manhattan hotel was built in 1929 by Schultze and Weaver. The architectural firm also designed the Breakers Hotel in Palm Beach, Florida; Miami Nautilus Hotel in Florida; and New York classics including The Park Lane Hotel, The Pierre Hotel and its neighbour, the Sherry-Netherland. Architect Lloyd Morgan also designed the Waldorf-Astoria Hotel in New York, which was the world’s largest hotel when it was completed in 1931. Schultze and Weaver also redesigned and renovated the Grand Ballroom in New York City’s Plaza Hotel in the autumn of 1929.

Hotel Lexington was the home of several Hollywood celebrities, including Dorothy Lamour, who is best remembered for appearing in the “Road” series alongside Bing Crosby and Bob Hope. In the late 1920s, the world-famous Hawaiian Room opened in the hotel. The space became synonymous with entertainer Arthur Godfrey, a well-known TV personality in the 1960s. He’d broadcast his radio show live from that space. Our recently renovated Arthur Godfrey Suite pays homage to his legacy.

Other nightclubs on-site included Chateau Madrid and The Playboy Club in the 1980s. And in the 90’s Denim & Diamonds outpost was established here.

Hall of Fame New York Yankees player Joe DiMaggio and actress Marilyn Monroe lived in Suite 1806 — now the Norma Jeane Suite — at Hotel Lexington during their brief marriage in the 1950s. The suite has been renovated with them in mind, boasting everything from baseball and Broadway memorabilia to art commemorating each of them.

Price: $185m

Price per Key: $255,172

THPT Comment: This hotel has been through several hands since the 1980s, including Taj Hotels of India. It’s a big beast of a hotel when it comes to refurbishment, and occupies a great position on Lexington and 48th Street.

First Seen: New York Business Journal

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