Hersha Sells Tribeca’s Duane Street Hotel to Premier Equities for $18M
Lodging company Sonder leases the inn’s rooms
By Celia Young May 18, 2021 7:45 am
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Hersha Hospitality Trust has sold the 43-room Duane Street Hotel in Tribeca for $18 million, the real estate investment trust announced on Monday.
Premier Equities — a privately held, real estate investment and management company — purchased the hotel at 130 Duane Street for $419,000 per room (the deal closed May 13). Premier in turn leased all of the 17,500-square-foot hotel’s rooms to short-term rental company Sonder, which bills itself as a hospitality company offering short- and long-term stays, according to a source familiar with the deal.
“We successfully closed on the sale of the Duane Street Hotel in New York City at an attractive price, bringing the asset-disposition strategy we embarked on nine months ago to equitize the portfolio to a conclusion,” Hersha Hospitality CEO Jay H. Shah said in a statement. “We believe our purpose-built suite of hotels is best situated to capture this increased demand from both leisure and business travelers over the next several months and through the recovery.”
Hersha and Premier entered into a binding sales contract for the hotel in late February with an original sales price of $20 million. Hersha used the proceeds from the sale — which had a 4.3 percent capitalization rate — to pay down debt.
This isn’t Premier Equities’ first partnership with Sonder: Premier purchased the Flatiron Hotel prior to the pandemic and leased it to Sonder in 2019. Sonder rents out fully furnished spaces there.
Sonder was interested in the 130 Duane Street property as part of its transition into more of a hotel brand. It was founded as a rental site similar to Airbnb, according to a source familiar with the Tribeca deal. The property is also one of the few non-union hotels that have sold since the pandemic began, making it more attractive to the buyer, the source said.
“We look forward to opening our doors at this fantastic property later this year, and will be operating the full building as a hotel,” said a spokesperson for Sonder.
Premier Equities did not respond to requests for comment.
A team of Cushman & Wakefield (CWK) brokers, including Dan OBrien, Jared Kelso, Steve Michels and Maurice Suede, brokered the deal on behalf of the seller. Premier Equities represented itself in the deal. Cushman & Wakefield declined to comment.
Update: This story has been updated to indicate that Sonder offers both short-term and long-term stays in its properties.
