Related Seeking Buyer For Hudson Yards Equinox Hotel
Related Cos. is reportedly looking for a buyer for its Hudson Yards-based Equinox Hotel, which opened three years ago.
Related, which is run by billionaire Stephen Ross and owns a minority stake in Equinox, is working with an adviser to drum up interest in the property, Bloomberg reports.
Between the hotel, office and retail space on offer, the property could sell for more than $200M, unnamed sources told Bloomberg. Equinox plans to stay on as the property manager following the sale, The Real Deal reported.
Although New York City has the only open Equinox Hotel at present, the gym chain had ambitions to open a dozen hotels in other cities around the country. Equinox Chairman Harvey Spevak said in 2019 the gym chain was building hotels in Seattle, Houston, Chicago and Los Angeles.
The 212-key hotel is a piece of the largely residential property, 35 Hudson Yards, and includes an outdoor terrace and a restaurant. The hotel is pet-friendly, and its rooms reportedly boast a “proprietary sleep system” with specialized mattresses and vitamins and supplements in place of a mini-bar.
The potential sale comes amid speculation as to Equinox Group’s financial health. The company lost $350M during the first year of the pandemic, Bloomberg previously reported.
During the pandemic, outposts of the luxury gym chain failed to pay rent in multiple NYC gym locations. Between unpaid rent from Equinox and budget gym franchise Blink Fitness, in which Related also owns a stake, landlords in NYC were suing the gym franchises for an estimated $18M as of June.
Another Related-owned company, SoulCycle, recently announced plans to close approximately a quarter of its 82 locations, including four in NYC, the New York Post reported. These closures follow the fitness company’s February disclosure that it needed to seek a new line of credit to cover its debts.
NYC hotel operators are currently executing a delicate balancing act. Although demand and tourism in the city are bringing in visitors at pre-pandemic levels, rising operational costs and pandemic-era debts may force some operators to consider selling, industry experts said.
"We will see more pressure on hotel owners being able to meet their debt service payments because debt will be more expensive,” JLL Senior Managing Director and co-head of U.S. Investment Sales Jeff Davis told Bisnow last month. “Whether or not that leads to more distress is a question mark.”
