(Adds New York hotel room rates in ninth paragraph.)
Jan. 18 (Bloomberg) -- The developers of Manhattan’s Trump Soho will put the hotel and its unsold condominium units up for sale, said Alex Sapir, one of the property’s builders.
The Sapir Organization, which developed the property with Bayrock Group LLC, has hired brokers Eastdil Secured LLC and Jones Lang LaSalle Inc. to hold an auction for the unspecified number of unsold condominium units and the hotel’s common areas, said Alex Sapir, president of the Sapir Organization.
Sales of the Trump luxury units come as the city’s supply of for-sale condos shrinks. There were 3,382 units listed for sale in the fourth quarter, down 4.6 percent from a year earlier, according to Jonathan Miller, president of New York real estate appraiser Miller Samuel Inc.
“This is a real trophy property,” Sapir said in an interview today. “An asset like this is a once-in-a-lifetime opportunity.”
The 46-story Trump Soho, managed by the Trump Organization, offers condos for sale that may only be used by their owners for 120 days of a calendar year. For the rest of the time, they’re offered as hotel rooms, with owners sharing in the rental revenue.
Testing the Market
The decision to hold the auction comes after the group received unsolicited offers for the hotel, Sapir said. “They were numbers that we would be very happy selling at,” he said.
The firm chose to sell by auction to gauge the depth of the buyer pool and to probe how much investors might pay for a hotel asset in Manhattan, Sapir said.
Prospective buyers will receive preliminary information about the sale as early as today and the auction probably will be held in March or April, he said.
New York City hotel room rates rose 2.6 percent in November from a year earlier to an average $279 a night, according to Smith Travel Research Inc. of Hendersonville, Tennessee. Revenue per available room climbed 6.1 percent to $230, as occupancies climbed by 3.5 percent over the year.
The property is being marketed to would-be buyers in Asia, Russia and the Middle East, Sapir said.
Sapir and Bayrock paid down $100 million of debt on the property owed to iStar Financial Inc. in 2010. Donald Trump characterized the deal as a “major paydown of the existing mortgage” which at the time stood at $295 million.
Units for Sale
The 391-unit Trump Soho development has recorded at least 90 sales, according to property-data website StreetEasy.com. Forty-two units are currently listed for sale, with prices ranging between $995,000 for a 425-square foot studio to $8.74 million for a 2,331-square-foot two-bedroom, according to StreetEasy.
The Sapir Organization, based in New York, owns office and apartment buildings in Manhattan including 11 Madison Ave., home to Credit Suisse Group AG, and 2 Broadway, where the Metropolitan Transportation Authority is based. It also owns about 515 apartment units in Tribeca.
The firm is in talks to acquire a parcel of land near the World Trade Center where it plans to build a hotel, Sapir said.
--Editors: Daniel Taub, Bob Brennan
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