Build Magazine June 2015

Build Magazine 6 Northwood Investors To Sell The New York Palace Hotel To Lotte Hotels & Resorts Northwood Investors, a New York-based real es- tate investment and management firm, confirms that it has entered into a contract to sell The New York Palace Hotel to LOTTE Hotels & Resorts, a Korea-based owner and operator of luxury hotels. The transaction is scheduled to close later this summer subject to satisfaction of customary conditions. “I am pleased we were able to restore and revi- talize The New York Palace to its position as one of the best luxury hotels in the world” said John Kukral, President and Chief Executive Officer of Northwood Investors. “We are honored to have had the opportunity to work with many dedicated employees at The New York Palace without whom the transformation would not have been possible. We are pleased that such a well-regarded owner as LOTTE will continue The Palace’s tradition of unparalleled service and luxury.” The LOTTE Group is one of the biggest Korean conglomerates with 79 affiliates and annual revenue of $74 billion in 2013. LOTTE Hotels & Resorts, as a member of the LOTTE Group, is ranked number 1 in the Korean lodging market. “LOTTE is a highly-experienced hotel operator and we are excited that they have chosen to acquire The New York Palace as part of their con- tinued global expansion” said Jonathan Wang, Managing Director of Northwood Investors. “We look forward to seeing the company build on its success through its ownership of The Palace.” About The New York Palace The New York Palace, a luxury midtown hotel on the corner of 50th & Madison, completed a $160 million redesign in the fall of 2013. The ren- ovation transformed the property’s premier rooms and suites in The Towers, a hotel-within-a-hotel. Additional upgrades included new lobbies, spe- cialty suites and restaurants and bars including Trouble’s Trust, The Lobby Lounge, Tavern on 51, Rarities and Pomme Palais. In addition to 24,000 square feet of updated event space, The Palace is home to private spaces located in the historic Villard Mansion that feature 19th century interiors and are ideal for lavish weddings, events and dinners. With 909 rooms and suites, The Palace is known for unparalleled splendor, spectacular views, spacious rooms and exquisite service. Located across the street from St. Patrick’s Cathedral and only steps from Rockefeller Center -- the hotel’s world-renowned courtyard incor- porates motifs from several 15th-century Italian cathedrals and has served as the entranceway to the historic Villard Mansion since 1882. The New York Palace gracefully blends the landmark Vil- lard Mansion with a contemporary 55-story tower. Colliers International Group Inc. has issued its first U.S. Capital Flows Research and Forecast report, which shows that commercial property investments are up 45% in the first quarter of 2015. According to the analysis of data from Real Capital Analytics, office and apartment transactions led the market, with quarterly sales of $33.5 billion and $33 billion respectively. “Overall, we are seeing investor confidence contin- ually emboldened, as evidenced by the increase in cross-border investments across property types,” said Brian Ward, President, Capital Markets & Investment Services | Americas for Colliers Interna- tional. “However, it is important to keep this encour- aging data in perspective. For example, although apartment transactions increased up to 68% over the same period last year and office sales saw a 43% increase; both property types experienced declines from their Q4 2014 levels.” Key takeaways from this report include: - Cross-border investment more than doubled (+111 percent) this quarter over one year prior, capturing $22.2 billion in properties across all major types - Office and apartment sales lead the way with quarterly sales of $33.5 billion and $33 billion, respectively - Traditionally leaders in cross-border investment into the US, Canadian investors were edged out by sovereign wealth funds from Asia. Examples include GIC’s acquisition of the huge IndCor industrial portfolio from the Blackstone Group - Entity-level transactions make significant jump in Q1 2015, with $21.5 billion worth of companies acquired. This was nearly equal to the 2014 full-year total - Liquidity events refresh coffers: Industrial transaction volume, which totaled $21 billion in Q1 2015, saw by far the largest jump this period, up 97 percent from $10.6 billion in Q1 2014 and 23 percent from $17.1 billion in Q4 14, due entirely to an unprecedented spike in entity-level deals. At $9.2b, Q1 2015 was the biggest quarter for industrial mergers since RCA started tracking the market. The bulk of this was due to one major transaction by Blackstone - Private equity takes profits: Blackstone was looking to cash out, and the word on the street was that an $8 billion IPO was in the works for their industrial subsidiary IndCor Properties. But when the Singapore Govt. Investment authority GIC Group came knocking with $8.1 billion the deal was done - Private to public REIT shift: Private, non-traded REIT CCIT, managed by Cole Capital, also found an exit strategy. After acquiring its portfolio of industrial and office properties between 2012 and 2014, including over $2 billion in property acquisitions in 2013. The bulk of these were single properties and small portfolios purchased from local developers - Outlook for interest rates uncertain: Long-term interest rates have been somewhat volatile in 2015 as Wall Street attempted to handicap the timing and magnitude of the first post-reces- sion increase in the Federal Funds Rate. Commercial Property Investments Up 45%, Reports Colliers International