By: Hadassa Kalatizadeh
The Martinique Hotel on Broadway, first opened in 1898, has managed to hang on for dear life.
Opened as a majestic hotel boasting mosaic tiles, baroque moldings and gold Romanesque marble staircases, the building has seen more than its fair share of hardships. As per a recent article in Crain’s NY, the palatial building on Greeley Square withstood two world wars, the Spanish flu, and was utilized as a welfare hotel. The past few years, posed new problems for the historic hotels. In March 2020, the 510-room hotel was shuttered due to the pandemic, all the employees were furloughed and by September it filed for bankruptcy protection. The hotel’s owner, Harold Thurman, passed away shortly after, bequeathing the estate over to his family.
The hotel was still beautiful, but it was risky and expensive. The land lease still had 68 years remaining, making the ground lease pricey. Hotels were still shuttered, and the 30,000 square feet of retail space were left ghastly vacant. To top it off, the building was landmarked and unionized, and also was in need of $15 million in facade repairs. “This was a scary deal,” said Eric Anton of Marcus & Millichap, the broker representing the sellers. “It had every challenge you can imagine.”
Still, it presented an opportunity. It was Andy Burnett of Burnett Equity, from Oklahoma City, who decided to take the risk. A newbie to the Big Apple’s hotel industry, Burnett sealed a deal to take on the building for $75 million. That’s when the Delta variant struck, however, renewing all the fears. “The lenders and equity investors said, ‘Uh oh, we don’t know if we can move forward,’” Anton told Crain’s. So there was a friendly renegotiation of the ground lease, offering more favorable terms for the buyer.
While both parties wanted to move forward, the banks were not willing to provide any financing for the deal because of all the vacant retail space. Enter Danny Volk: an old-timer in the New York City’s nightlife business and formerly an executive at Catch Hospitality Group. He came in with broker Andy Kim to try to fill the hotel’s retail space so it can get a loan. As per Crain’s, within 12 weeks, the pair managed to lure six new eateries and cafes for 15 year terms with an asking rent of $250 per square foot. Financing was obtained and the deal was closed for $55.5 million. The hotel is now open and operating as a Hilton Hotel, with guests slowly trickling in. The hotel has indeed withstood the test of time.
