LuxUrban Hotels Picks Up 2 More Shuttered NYC Hotels
LuxUrban Hotels has signed master lease agreements for two Times Square hotels, adding almost 300 keys to the company’s portfolio.
The Miami-based company has signed two 35-year agreements with five-year options for the 79-room Hotel 46 Times Square and the 213-key The Hotel @ Times Square, the company announced Monday in a release. The hotels are expected to start operating in the third and fourth quarters, respectively.
Both hotels had been struggling for some time, Crain’s New York Business reported. Hotel 46 Times Square at 129 West 46th St. was sold by Apple Core in the summer of 2019 to an LLC linked to law firm Rivkin Adler for $24M and had been closed since August.
The Hotel @ Times Square, located at 59 West 46th St., was auctioned after owner Premier Hotels defaulted on a $4M loan. Premier bought the hotel for $60M in early 2022 when it was being used as a migrant shelter after its former owner, Apple Core Holdings, defaulted on loan payments.
New York City saw 56.4 million visitors in 2022, up by 71% from 2021, according to NYC & Co., the city’s official tourism marketing branch. But the city’s hotel industry is facing a series of hurdles, with foreclosures affecting major names like Margaritaville in Times Square and the Williamsburg Hotel.
LuxUrban jumped into the NYC market early last year and rounded out 2022 with the acquisition of a former Ritz-Carlton in Battery Park City where lenders sought foreclosure and then-operator Urban Commons filed for bankruptcy.
The hospitality company, which signs master lease agreements with distressed hotels in major urban centers across the U.S., was previously a short-term rental company operating as CorpHousing Group and has faced lawsuits in multiple states for failing to pay rent on apartments and hotels it operated.
LuxUrban’s transition to a hotel operator was rocky. The company was dogged by accusations from dozens of customers that it had charged them as many as three times for rooms that it failed to provide, and current and former employees have sued the company for tens of thousands of dollars in unpaid wages, Bisnow previously reported.
The company has aggressively grown its portfolio since its pivot, targeting distressed properties it can take over at a low cost and operate at a profit. LuxUrban leased 20 properties spanning 1,673 units as of May 9, it said in a regulatory filing. It posted a $2.7M loss in the first quarter.
