Last week Marriott International acquired the W Hotel in Union Square for $206 million. The purchase of this hotel and 26 others across the United States brings Marriott into the early stages of updating W Hotels, making them more upscale and each property will be a little different, according to Marriott. W Brand launched by Starwood Hotels & Resorts Worldwide Inc. In 2016, Marriott acquired Starwood with the main focus of using their hotels as examples for new visions of the brands.
Fifth Avenue Tower Gets Makeover from Brookfield
Brookfield Asset Management is giving 666 Fifth Avenue a $400 million makeover. Once completed in 2023, they will be ready to lease over 1.6 million SF to tenants. Brookfield purchased this property with a 99-year lease in 2018 for $1.26 billion. When finished renovating, this building will be one of the costliest in the city. The current asking rent is between $60-$70/foot, but Brookfield hopes to sell space over $100/foot once done. Including the interior work, they plan to redesign the entire exterior with floor-to-ceiling windows and changing the address of the building from 666 to 660 Fifth. According to the company, changing the address is essential because “it will be a completely new building with a completely new identity”.
· SoftBank Group Corp has prepared a financing package for several billion dollars. This will give SoftBank control of WeWork and further push out former CEO Adam Neumann. JPMorgan Chase & Co is also looking into ways on how to raise billions of dollars in debt for WeWork. However, WeWork went with SoftBank’s proposal.
· Adam Neumann will be walking away with almost $1.7 billion from SoftBank’s proposal. He will also be severing most of his ties with WeWork.
· WeWork will face rising real estate costs that could go over $10 billion in the next four years. They committed to lease payments of $10.2 billion between mid-2019 to the end of 2023 and spend almost $1 billion for building out newly leased offices. Their annual lease costs will increase from $1.75 billion to $2.43 billion in 2023.