Expanding its portfolio with the addition of a luxury hotel, the joint venture of Deka Immobilien Investment GmbH and Ashkenzay Acquisition Corporation has closed on the acquisition of the Marriott New York East Side, at 525 Lexington Ave., for $270 million. This was their second joint venture in Manhattan, after purchasing the retail condominium at 522 Fifth Ave. last fall (NYLJ, Nov. 5, 2014).
The 665-room, 406,261-square-foot midtown hotel at Lexington Avenue and 49th Street was sold by Morgan Stanley, which reportedly purchased the property for about $287 million in 2005.
A Kriss & Feuerstein team of partner David Kriss and associates Matthew Klein and Mary Willis White represented the joint venture.
King & Spalding senior partner Wilfried Witthuhn, who has offices in New York and Frankfurt, New York-based counsel Jill Anderson and associate Hilary Davis handled the joint venture and related partnership agreements for Deka.
In Germany, Mario Leissner, managing partner and founder of the King & Spalding’s Frankfurt office, along with associate Cüneyt Andac assisted Deka on German regulatory issues.
Additionally, King & Spalding Atlanta partner Timothy Goodwin and a New York team of partner Andrew Charles, senior associate R. Davis Powell and associate Scott Witthuhn represented Morgan Stanley. Charles joined Kramer Levin Naftalis & Frankel on May 14.
This was Ashkenzay’s “first purchase of a hotel property in New York City,” Kriss said. Ashkenzay usually buys and develops retail and office properties but “expanded [its] property range” by purchasing a residential building last fall and now the Marriott hotel, he added.
The new ownership plans to improve and upgrade the property and intends to continue its operation as a Marriott.
“The investment structure for the Marriott East Side provides Deka with predictable annual cash flow and future upside in one of the world’s most defensive hospitality markets,” said Savills Studley’s Robert Stamm, executive managing director of U.S. cross boarders investment, who assisted Deka Immobiliene on the deal.
Deka, a member of Sparkasse Financial Group, provides real estate expertise to investment funds of the DekaBank-Deutsche Girozentrale.
Ashkenzay Acquisition has acquired more than 15 million square feet of retail, office and residential properties across the United States, Canada and England.
Jones Lang LaSalle’s Jeffrey Davis, managing director and head of the New York office, hotel and hospitality group, handled the marketing of the hotel.