B
rookfield Property Partners is taking a new approach to managing its distressed assets: selling them, even at a loss. The company recently sold the Ink48 Hotel in Hell's Kitchen for $62 million, 25% less than it paid in 2019 and about $5 million more than the building's loan. This sale marks a shift from fighting refinancings and fending off defaults.
Montreal-based Leyad teamed up with New York's Capstone Equities to acquire the hotel in a 50-50 partnership, marking Leyad's debut in New York City. The firm's CEO, Henry Zavriyev, believes that New York City hotels are on the cusp of a "value boom" due to factors like the Airbnb ban and limited new construction.
As supply constraints and rising demand drive up hotel values, investors like Leyad are actively pursuing distressed opportunities. Brookfield is also offloading properties in New York and beyond as it struggles with office assets and zombie malls. The firm is looking to sell luxury apartment complexes in Chicago's South Loop and San Francisco's SoMa neighborhood.
Meanwhile, Brookfield is deploying cash in major deals, including a $845 million multifamily portfolio purchase from Blackstone REIT and the acquisition of $1 billion of Valley National Bank's debt at a 1% discount. This move comes as more banks scale back their commercial real estate exposure.
