The NoMo SoHo hotel owned by the Sapir Corp. saw its net operating income fall in the third quarter, dragging down the company’s overall performance in the third quarter.
In the last week, Alex Sapir’s real estate company, which trades on the Tel Aviv Stock Exchange, saw its stock price fall by about 18 percent from its pre-earnings price of 508 shekels on Nov. 28 to 414.9 shekels as of Wednesday. It’s down from about 700 shekels a year ago.
According to its quarterly earnings report, released on Saturday, the Israeli company had net losses of 18.28 million shekels, the equivalent of $5.26 million. Losses grew by nearly 80 percent from 10.16 million shekels in the third quarter of 2018. Sapir Corp.’s revenue in the third quarter of this year was 30.1 million shekels, down slightly from 31.95 million shekels year-over-year.
The developer’s NoMo Soho hotel at 9 Crosby Street in New York reported net operating income of $4.2 million for the nine-month period ending on Sept. 30. That’s a 28.6 percent annual decline in income compared to the same period in 2018.
Overall, the hotel market in New York City is suffering. A recent report from the financial firm PwC stated that “continued increases in supply, coupled with pressures on demand stemming from continued trade tensions and slowing economic growth, are having a profound impact on Manhattan hotels.”
Rising operating costs, as well as a drop in income from the food and beverage operations at the hotel is partially to blame for the income drop at NoMo Soho, according to the disclosures. Despite that, revenue per available room and occupancy rose during the first three quarters of 2019.
A Sapir Corp. spokesperson said that hotel operators in New York City “have felt the effect of various market factors such as increased supply over the past year,” and that NoMo Soho maintained revenue “while significantly decreasing our sales and marketing expenses.”
An appraisal of the property notes that the NoMo Soho’s occupancy outperformed its competitors in the first half of the year. Occupancy increased to 88 percent from 84 percent.
Highgate has been managing the 264-key, 25-story hotel since September 2018. About a year ago, the Sapir entity that owns the NoMo Soho secured a $73.3 million loan from the estate of the late Tamir Sapir, which matures in January 2022. It has two one-year extension options. The extension options are subject to the extension of the $115 million senior loan from Goldman Sachs.
In Miami, Sapir is looking to sell the Miami 18 development site. The firm also recently secured its temporary certificate of occupancy for Arte by Antonio Citterio, a 16-unit, 12-story condominium building at 8955 Collins Avenue in Surfside. After it got its TCO, Sapir hired Douglas Elliman to take over sales and marketing from the Corcoran Group.
Sapir has only sold two units at the project, to his mother, Bella, and to his sister, Ruth Sapir-Barinstein, for a combined $20 million for the entire eighth floor.
Sapir expects to receive its permanent certificate of occupancy in the second quarter of next year, according to the company’s third quarter earnings.