Summary of Crain’s NY article of 10/26/20 on “Breathing New Life Into Dying Hotels”
by Natalie Sachmechi
25% of New York’s 700 hotels are expected to close by 2023
10 : number of city hotels that are at least 90 days past due on their mortgage payments
1) at the low point earlier this year, NYC hotels could fill only 15% of the city’s 128,000 rooms (STR Analytics)
2) Since then, the number of rentable rooms has dropped to 85,000 now that more than 100 hotels have been shuttered temporarily.
3) The Roosevelt, the Marriott East Side, the AKA Wall Street and a consortium of Times Square Hotels are among those that have closed permanently .
4) More than 60 others have offered their space for alternative use on a temporary basis, including the Upper West Side’s Lucerne Hotel, which is housing homeless people and is the center of a hot debate between neighborhood residents and the City over how long the people should stay.
5) The W Hotel in Union Square, now owned by Marriott, is housing NYU students for the Fall Semester.
6) A handful of developers are making moves to repurpose hotels permanently, including the owners of the Bryant Park Hotel, who are in talks to convert the landmark, century-old building back to its original purpose: office space.
7) Currently 10 hotels in the city are at least 90 days past due on their mortgage payments (Trepp Analytics) . They collectively owe more than $800 mm to their lenders
8) One of those hotels -The Standard High Line,-in the Meatpacking District, owes $103 mm
9) Even at the Financial District’s Holiday Inn, where rooms are half the price they are at the Standard, $87 mm in loans are in arrears.
10) Occupancy rates have crept back up to 38% since cratering in March (STR Analytics)
11) The market will not make any meaningful kind of rebound until at least 2025 (Hotel Association of NYC)
12) At least 73 of the city’s many thousand residential buildings were once factories, schools or hospitals, though hotels were most commonly reborn as apartments (Rent Café Analytics)
13) The 116 year old Prince George Hotel was a glamorous hotel until the 1980’s , when it became a welfare hotel. After sitting barren for 7 years it was purchased by Breaking Ground, an affordable housing developer, which rehabbed it into a residence for the homeless.
14) “From the street level, it’s hard to absorb all the changes” former Deputy Mayor Dan Doctoroff wrote in “Greater Than Ever: New York City’s Comeback”, his account of rebuilding the city after 9/11
15) Local Law 50: Because it was so popular to convert hotels to apartments post 9/11, such conversions were restricted in Manhattan by Local Law 50 in 2015 . That law barred Manhattan Hotels with at least 150 rooms from converting more than 20% of them to other uses during the 2 year period. That law expired in 2019.
16) Zoning issues: Apartment buildings require a 30 foot long yard, while hotels need only 20 feet. To qualify as multi-family housing, apartments must be a certain size and must include at least a kitchenette- which is not common in hotel rooms. Apartments may not be built in most manufacturing zones.