Alessandro
Colantonio said the owner has always coveted the New York City market, but
could never get the stars to align. Now it has three deals in 16 months.
MIAMI — The New York City hotel
market can be daunting. It fell out of favor during the depths of COVID, but in
the past few years, it has again become one of the hottest markets in the
country, with ADR, especially for luxury properties, seemingly having no
ceiling.
But it never fell out of favor
with Miami-based investor Gencom.
“It’s always been a preferred
market for us… We have always had it on the radar,” said Gencom Chief Investment Officer Alessandro Colantonio. “It’s a market we’ve always wanted to be
in. It was just never the right confluence of pricing, the right story, the
right macroeconomic environment and things just never fell in the right place
with the stars and moon aligning.”
It’s a market we’ve always wanted to be in. It was just never the right confluence of pricing, the right story, the right macroeconomic environment and things just never fell in the right place with the stars and moon aligning.
Alessandro Colantonio
The stars and moon finally
aligned for Gencom over the last year and a half as the acquisitive investor
acquired the Thompson Central Park in 2024 and the InterContinental New York
Times Square in December 2025.
Colanonio said he thought Gencom
would be done in New York for awhile but the universe had other plans in mind
as the Ritz-Carlton New York Central Park in Midtown Manhattan became available
while the company was working on the Intercontinental deal. So, Gencom acquired
its third New York City property in 16 months in a deal that closed in
two-and-a half months (and through two holidays), which is lightning fast in
today’s more methodical M&A environment.
“You have to get the lawyers
moving and this one even more so, going through the holidays, having our
conversations with our equity partners and figuring out who’s going to provide
the financing,” he said. “The track record that we’ve been able to build now in
this luxury segment has gone a long way when we were reaching out to our
partners to say, ‘We have this deal. It has a short timeline. Here’s the
business plan.’ We have a great group of investors who understand the deals.
They understand what we’re doing here. They know the track record. They know
the relationship with Ritz-Carlton. So, that made it a little bit easier.”
How the deal came
together
Colantonio said nailing the
finance piece with Mexico City-based Banco Inbursa, a frequent collaborator,
was key to getting everything done so quickly.
“We didn’t have time to hire a
broker and run a process like that. We needed to make six, seven or eight calls
to relationship lenders and say, ‘This is what we want to do.’ The feedback was
tremendous,” he said.
“Within a few days, we had a
handful of quotes to sift through, and one relationship lender in particular,
Banco Inbursa, this is our third with them… We got that figured out very
quickly in early December and everybody knew they had to put their foot on the
gas.”
Ultimately, the lure of the
historic hotel, located across the street from Central Park, was too great,
Colantonio said.
The Ritz-Carlton New York Central Park is Gencom's third acquisition in the city in 16 months.
“We thought two big deals in New
York, we’ll take a little bit of a pause and then this Ritz-Carlton deal came
up… I said, ‘This is one of those where, when it becomes available, and it’s
the right timing, it’s the right pricing, the right dynamic, and we need to move
quickly because this is an asset that we have targeted in our mind for many
years,’” he said.
While Colantonio said there will
be some renovations made, mainly to the lobby and guest rooms, one of the main
appeals of the hotel was that the previous owners (Westbrook Partners and Korea
Investment Corp.) spent a good chunk of money renovating the property in 2019
and there has not been a lot of wear and tear on that work yet.
“It’s funny, we debated if we
need to go and completely redo this property… but there’s something very
charming about this real estate. It’s old New York luxury and historic. So, to
some extent, we want to keep a lot of that charm,” he said. “You want to
renovate, you want to refresh, you want to improve, but you have to do it in
a way that really still celebrates what this is. It’s Central Park, it’s
arguably one of the most famous addresses [in New York City]. We
don’t want to change that too much.”
Gencom pipeline
When asked about Gencom’s
pipeline, Colantonio said that after the Ritz-Carlton sale closed, the company
issued an LOI for another luxury asset the next morning. Suffice to say that
Colantonio expects his firm to be very active on the buy side in 2026.
“It was like, ring the bell, celebrate for the
night, and then let’s work,” he said. “We have a great pipeline in mind, and
there are a couple of assets that are similar to the Central Park deal that we’ve
had our eye on, and maybe it is the right time now to go back and take another
look.”
When asked about potential
dispositions, Colantonio said that the environment is different right now for
the assets Gencom holds.
For us who take a much longer-term view of the world, the opportunity there this year is maybe more on the refinancing and recapitalization side, versus outright selling of assets.
Alessandro Colantonio
“For us who take a much
longer-term view of the world, the opportunity there this year is maybe more on
the refinancing and recapitalization side, versus outright selling of assets,”
he said. “We have a few properties that were two or three years ago vintage,
where financing was a little bit frothier at the time, that we’re going to look
to maybe refinance and get some more efficient debt in place, and then evaluate
from there.”
Colantonio said the bid-ask
spread has compressed in the past few years.
“It’s compressed generally across markets that we’re
looking at and specifically in New York. Part of that is that financing costs
are becoming more attractive to borrowers and buyers. So, we can be a little
more competitive on the bid. That helps narrow the gap,” he said. “But I will
also say that I feel like sellers are valuing certainty and credibility in
execution, maybe more over the last 24 months.
“Each of these deals that we
looked at was very competitive. They were brokered and there were multiple
bidders. We had to pitch ourselves to the sellers and say why we were the best
buyer. Equal to pricing and economics, it came down to: are you a group that’s
going to put this under contract and do what you say you’re going to do?”
Colantonio has been with Gencom
for almost 18 years and said the biggest change in philosophy is the challenge
posed by ground-up development right now.
“When I started here, we were definitely balancing
more existing and ground-up development. We had a lot of development in the
pipeline back then. We had fewer partners, fewer lenders and a lot more eggs in
single baskets,” he said. “The thesis has changed in the sense that we’ve
really made an effort to broaden our relationships on the lending side, broaden
our relationships on the equity and partnership side, and we’ve always tried to
stay pretty focused in that upper upscale and luxury.”