Brookfield Sells Hell’s Kitchen Hotel Ink48

Between fighting for refinancings and fending off defaults, Brookfield Property Partners is taking a third approach to sidestepping distress: offloading assets, even at a loss.

The firm sold the Ink48 Hotel in Hell’s Kitchen for $62 million, 25 percent less than it paid in 2019 and about $5 million more than the building’s loan, according to a press release and property records.

It’s unclear if a mortgage maturity spurred the sale. Brookfield did not return a request for comment.

On the buy-side, Montreal-based Leyad teamed with New York’s Capstone Equities in a 50-50 partnership. The deal marks Leyad’s New York City debut.

The firm’s CEO, Henry Zavriyev, pegged the acquisition as part of a bigger bet that the city’s hotels are on the cusp of a “value boom” given the Airbnb ban, snapback in tourism and the special permits the city required in 2021 to limit new hotel construction.

New York has also lost 16,000 hotel rooms since 2019 as spaces were converted to migrant housing, a recent JLL report found.

Amid those supply constraints and projections of rising demand, loans are maturing and investors such as Leyad are champing at the bit. “We are actively pursuing other distressed hotel opportunities here,” Zavriyev said.

Capstone founder Josh Zamir declined to comment.

As for Brookfield, the investment giant has been offloading properties in New York and beyond as it struggles with office assets and zombie malls. Some sales don’t appear to be motivated by immediate distress, but rather are a prophylactic measure or a way to drum up liquidity.

The firm, for example, is looking to sell a luxury apartment complex in Chicago’s South Loop and another in San Francisco’s SoMa neighborhood. Both buildings have strong occupancy in parts of town hit hard by the pandemic.

Brookfield is also trying to sell 3333 Broadway for $350 million, a $50 million discount compared to what it last tried and failed to get for the mammoth Manhattan apartment building in 2022.

But it’s not all mess and distress for Brookfield. As the giant firm sheds less-desirable assets, it is deploying cash in a number of major deals.

In late November, Brookfield bought an $845 million multifamily portfolio from Blackstone REIT in a wager that multifamily demand would rebound in some Sun Belt states, CoStar reported.

It also nabbed $1 billion of Valley National Bank’s debt at a 1 percent discount this month. The deal comes as more banks are scaling back their commercial real estate exposure.