Andrew Farkas’ Island Capital is looking to get in on New York City’s booming hotel market, offering the landmarked Lexington Hotel in Midtown East for sale.
The real estate merchant bank and its joint venture partners, Three Wall Capital and MCR, listed the 725-key hotel, eyeing a price of about $275 million, The Real Deal has learned. The property is being marketed by Eastdil Secured.
The hotel opened in 1929 and was given landmark status in 2016. It boasts a storied past, hosting Hollywood icons Marilyn Monroe and Joe DiMaggio during the couple’s brief marriage in the 1950s.
Once part of a bustling “hotel row” stretching along Lexington Avenue from about 52nd to 45th Street, the corridor has seen its hotel inventory shrink dramatically over the past decade. The former Midtown DoubleTree and Marriott East Side have been repurposed as student housing, and the Midtown East Maxwell hotel closed in 2020.
Elsewhere in Midtown, the iconic Waldorf Astoria has downsized from 1,400 to 375 rooms and the Roosevelt Hotel will likely be sold and redeveloped as an office tower.
The Lexington stands as the last major “big-box” hotel in the neighborhood, giving potential owners the opportunity to seize on visitors to the surrounding office towers, like JP Morgan Chase’s newly-opened headquarters one block to the west.
The property last changed hands in 2021, when the joint venture acquired it for $185 million. The hotel had been closed since the pandemic and renovated by its previous owner, DiamondRock Hospitality. It reopened under the Marriott International Autograph Collection brand shortly after.
The hotel is hitting the market as New York’s occupancy rates approach pre-pandemic levels and the city’s luxury hotel market surges on the back of rebounding tourism and business travel.
The average occupancy rate surpassed 84 percent a week in 2024, up from a pandemic low of about 50 percent, according to a report by Lodging Analytics Research & Consulting. But expenses tied to labor costs, high interest rates and property taxes continue to affect the bottom line.
Eastdil Secured declined to comment.
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