Sherwood Equities Sells Renaissance Hotel Times Square to Apollo and Newbond Holdings
The 200,000-SF, 317-key hotel changes hands for the first time since 1985
By Brian Pascus October 10, 2023 2:17 pm
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When the ball drops at Times Square this New Year’s Eve, a new owner will be looking down from one of the most recognizable hotels in New York City.
The Renaissance New York Times Square Hotel at 2 Times Square — the hotel component of the iconic mixed-use building that anchors the northern part of Times Square — is under contract to change hands. Sherwood Equities has agreed to sell the 200,000-square-foot, 317-key hotel unit of the building to Apollo Global Management (APO) and Newbond Holdings for $165 million. News of the sale was first reported in the Wall Street Journal.
Newmark (NMRK)’s Adam Spies, Adam Etra, Avery Silverstein, Marcella Fasulo and Nikita Bernstein advised Sherwood on the sale of the hotel, along with Art Adler of Adler Hotel Advisors, according to sources close to the deal.
“Timing is everything for Sherwood,” said Jonathan Snider, senior vice president of Sherwood Equities. “And while certain sectors of the commercial real estate industry are still struggling, with the pent-up demand for travel, Times Square hospitality has never performed better. We felt this was a good time to harvest the hotel while the wind was at our back.”
The change of hands of this portion of 2 Times Square comes after 38 years of ownership by Sherwood, which purchased the land beneath the property in 1985 and developed the building in 1990. Sherwood Equities also developed 1 Times Square (where the physical ball actually descends on New Year’s) and nearby 1600 Broadway, a mixed-use property that features a residential condominium, digital billboards, and retail space, including the famous M&M’s World.
Sherwood will continue to own the signage component of 2 Times Square — which includes Coke, Samsung and Prudential advertisements along with digital signage — and the retail component, currently leased to Olive Garden, Van Leeuwen’s, and Max Brenner Chocolate, in addition to others.
“This building is really an international icon and a symbol of New York,” said Snider. “If one picture says New York City, it’s 2 Times Square. It’s the quintessential postcard.”
The Renaissance New York Times Square Hotel falls under the Marriott brand and overlooks the site of the ball drop. The hotel sits at the north junction of Seventh Avenue and 48th Street in Times Square, a corner that receives more than 164,000 daily visitors, according to Newmark.
Sherwood, which holds other assets outside the hospitality industry, selected an experienced hotel operator by selling to Neil Luthra, co-founder of Newbond Holdings, whose firm has completed $1 billion worth of transactions and oversees 7,000 hotel keys. And in 2021, the firm announced a partnership with Madison Realty Capital to create Madison Newbond, a hotel debt platform that originates and acquires first mortgages, mezzanine loans and preferred equity on hotel properties in the U.S., according to the firm’s website.
“We’re not hospitality focused, and we wanted to bring in a best-in-class hotel operator for the hotel component of this building,” said Snider. “We found that Newbond and Apollo were just that.”
The sale of 2 Times Square’s hotel comes just weeks after New York City’s Local Law 18 came into effect and eliminated thousands of short-term rentals and Airbnb faux hotel rooms from being legally listed on the market.
Legislators passed the law following a pressure campaign from the hotel industry against short-term rentals and unregulated Airbnb units. The hospitality industry in New York has fought its way back from plummeting occupancy levels during the three-year COVID-19 pandemic to a more healthy place amid increased tourism in 2023.
Neither Newbond or Apollo returned requests for comment.
Brian Pascus can be reached at bpascus@commercialobserver.com
