24.4.12
Condo Zombie- Soon Taking Reservations
Here at Cubed Advisory, we have seen several stalled condo projects go rental, what we don't see quite as often is a stalled condo going hotel. After multifamily being driven by record rents, hotel is the next most active real estate asset class in the city, with several under construction or renovation (opens PDF).
So it shouldn't be all that surprising to learn from the Full Story below that Turkish chain Marmara Hotels and Residences have picked up the stalled Jasper condo at 114 East 32nd, from Petra Capital Management for $55M. Originally planned as 80 condos, previous reports had mentioned reworking the 122kSF building into 200 hotel units. The $450/SF purchase price is on the higher end of average Manhattan hotel land purchases, but Marmara should be able to achieve savings by the fact that the building is extant. Gut reno is cheaper than ground up- especially when the previous owner has already completed the gutting. Marmara is still going to have to keep a close eye on the bottom line as any construction over $250/SF is going to push them over the current average NYC hotel development figure of $488k/room. We are predicting that Marmara is much more likely to be saddled with a full development cost of $550-575k/room.
Full Story
So it shouldn't be all that surprising to learn from the Full Story below that Turkish chain Marmara Hotels and Residences have picked up the stalled Jasper condo at 114 East 32nd, from Petra Capital Management for $55M. Originally planned as 80 condos, previous reports had mentioned reworking the 122kSF building into 200 hotel units. The $450/SF purchase price is on the higher end of average Manhattan hotel land purchases, but Marmara should be able to achieve savings by the fact that the building is extant. Gut reno is cheaper than ground up- especially when the previous owner has already completed the gutting. Marmara is still going to have to keep a close eye on the bottom line as any construction over $250/SF is going to push them over the current average NYC hotel development figure of $488k/room. We are predicting that Marmara is much more likely to be saddled with a full development cost of $550-575k/room.
Full Story
Labels: condo to hotel, hotels, Jasper, Marmara Hotels and Residences, Murray Hill, Petra Capital Management, redevelopment
7.2.12
Less Parking, More Hotel
From the Full Story below, one could always make a joke about NYC parking spaces being slightly smaller than the average hotel room and only slightly more expensive. As the article notes, OTO Development is looking to cast aside the jokes and get to work on their second site in the city. After purchasing a low slung parking garage, the OTO team is planning to redevelop the site into a hotel. Known for budget brands like Hampton Inn and Hilton Garden Suite, OTO is likely to try to squeeze every last inch of development rights from the site.
At Cubed Advisory, we have done some back of the napkin math and figure that OTO is going to have to squeeze hard after paying a not unreasonable $361/sf buildable for the land.
With a buildable area around 99540sf and a likely development cost of around $850/sf, the overall project cost is around $120.5M. With budget hotels averaging 350sf/per room across the building, that is a per room development cost of $422k.
Ouch!
If OTO were to bring the per room development cost down to a more reasonable $375k-380k per room, they would be looking at room sizes of 319sf. This would require a hotel with very small rooms and/or no real amenities.
It is also happens to be twice the size of an average parking space.
Labels: development, hotels, OTO Development