EDITION Times Square Closing Permanently

Filed Under: Hotels, Marriott

COVID-19 has obviously had a terrible impact on the hotel industry, and there’s no doubt that a lot of hotels will be forced to close permanently because of this. That’s especially true for hotels that were already having financial problems coming into this pandemic.

Well, that’s exactly what’s happening to one popular Marriott affiliated property in New York City this summer.

EDITION Times Square ceasing operations

As reported by Bloomberg, the 452-room EDITION Times Square, which only opened in February 2019, will be closing permanently in August 2020. The hotel has now provided notice to employees, government officials, and unions, that they expect to cease operations around August 13, 2020.

The EDITION is part of a mixed-use building that was once appraised at $2.4 billion.

The property is owned by Maefield Development, and Marriott allegedly warned the owners in March that a cash shortage would cause the developer to default on their contract.

Unfortunately for this project, there were already major issues before the pandemic changed the travel landscape in the US. In December 2019 a group of lenders already worked towards foreclosing on the project, before the situation got even worse.

EDITION Times Square lobby

Expect other hotels to close as well

While the EDITION Times Square was having issues before the current crisis started, expect that this will be far from the only property to close permanently. New York City hotel occupancy has fallen below 15%, and obviously that can only be sustained for so long without support from lenders.

For example, there’s also talk about how the value of the Hilton Times Square has been written down to less than the $77 million mortgage on the property, which may cause the owners to simply default.

The Hilton Times Square is also at risk of closing

Bottom line

Just as some airlines will go out of business as a result of the current pandemic, some hotels will go out of business as well. This is especially true in major cities, as it’s likely that business travel won’t recover fully in the coming years, and it’s also likely that tourism will be focused on less populated areas.

As far as the EDITION Times Square goes, it’s sad to see a hotel close after just 18 months, but the hotel already had financial problems before this started. There’s another EDITION property in New York that will continue to operate.

Comments
  1. The hotels that close will eventually come back because what else can you do with a 452 room hotel…? A change of ownership will take place and it will reopen as a different brand.

  2. @tef0306. I witnessed the St Regis in LA, a hotel I used to love in the early 2000’s, and was a relatively new building (nowhere near as new as this though), get torn down and replaced with condos.

    I would imagine a new owner and luxury brand taking it over as a hotel. But they could also do a 1-2 year redesign of spaces and enlarge rooms to make apartments or condos, even offices. NYC is going to have a glut of rooms for a few years now, and on the luxury front it is overwhelmed with competition. Even Aman is opening there this year.

  3. @tef0306
    As the Waldorf Astoria in NY has shown, you convert to (mostly) apartments.

    Or there’s the example of the St Pancras in London, which converted from hyper-luxury hotel to an office block … and then a century later back again to a hotel + apartments.

  4. Being in the construction industry for four decades in various forms there were simply too many properties built in the last ten years like the airlines too many seats/beds that could not be sustained in a down turn, which aside from the virus disruption was going to happen. And yes you will see more many more. Aside from the fact that high end hotel nights will decline so will the lower end which like the discount carriers too many. Will be very sad for the people that work there, some of those jobs will forever be lost. I sense at least a 10% total job lost across the board when this is all over.

  5. I know you focus on aspirational flight and hotel products, but it would be awesome given the economy if you could do some reviews of “normal people” hotels when you resume travel, such as that Hilton you mentioned. I Really like Hampton Inn and Embassy Suites for both business and leisure travel in the US. I can understand that they are not as locally differentiated as a St. Regis or Ritz Carlton, but doing just a couple from each brand would provide a good representation of the hotels that most of us stay in.

  6. In NYC, if you convert a hotel into condos, you will need to reserve a portion of units to low income people with very low rents.

    It’s like forcing section 8 into your property regardless your own will.

    Most property owners don’t want to get involved into drug dealers or illegal immigrants. And they can’t offset development cost due to lower rents in a highly expansive city. That’s why NYC has tons of century aged houses unable to get redeveloped.

  7. @Creditian you are right, to a point… Yes they have a required portion for low income households. “drug dealers and illegal immigrants” are not (always) filling those. They go through insanely rigorous background checks and interviews to live in those buildings. (I’m sure there are exceptions, being NYC and all… but those are the experiences with buildings I am familiar with).

  8. @Creditian Most folks in section 8 housing work hard doing an actual job or are looking for work right now. I have no idea how many would be considered “drug dealers and illegal immigrants,” but I would imagine that is more stereotype than reality.

  9. I guess that extra money from “destination amenity fee” wasn’t enough to save them

  10. Was gonna just hop in here and bash Creditian like everyone else, but then I realized he must be a troll, right? This can’t be an actual thought that an intelligence person with a brain would have, because it’s just so laughable.

    In any event, I do think it is probably unlikely that it gets converted to an apartment building, largely because of it’s location. Not too many people actually want to live in/around Times Sqaure.

  11. @Sam – As someone who stays in the Hampton Inn/Embassy Suites class of hotels while travelling for work, there’s so much variety from location to location that I don’t know if covering a few of them will give a reasonable idea of what they’re like. I tend to find that the newer ones regardless of brand are good but man, if you get stuck with an old location that hasn’t been remodeled in ages…

    I also find that if they don’t show a photograph of the bathroom, you can brace yourself for at best a mediocre bathroom and at worst, a terrible one.

    Also, Creditian, you are an absolute wanker.

  12. So I suppose getting free breakfast there as a top tier elite in the future is now a moot point? 😉

  13. All they had to do was raise the destination fee to 300 dollars a day then add the Covid 19 $100 dollars a day new surcharge and deep cleaning & disinfecting daily fee and they would have been fine

  14. While I hate seeing good people lose their jobs, it serves these management firms and their decision makers. Sadly, those making bad decisions usually have moved on and are not there at the downfall. i came of age staying at the Sheraton Bal Harbour near Miami Beach. It is probably successful based on exquisite timing , it was torn down to create a Regis with Condos. Anybody doing such a project with opening this year takes a big loss.

  15. Unfortunately, theres not much use for that property as your going to see and exodus out of NYC. The city is gonna be under a major budget shortfall and the tax revenues aren’t gonna be there. Already they are a high tax state and with biz moving to more virtual and when they do rehire at lower wages you can see the benefit to live in NYC is not very economical thus converting to condos or luxury hotel or even office space isn’t really gonna work unless it’s much more affordable housing which is what their gonna have to do if they intend to keep people in NYC.

  16. Would love to see every Marriott property that doesn’t participate in Bonv*y fully exit the company

  17. @UA-NYC Completely agree. They just do damage to the brands

    @Crediatian: Why don’t you add “And some of them might be nice people”

  18. Shame…I was involved in the opening of it, and it was a very nice place, and the staff are really great.
    The location sucked (although I say that as a local, not a tourist inexplicably drawn to times square), but that was kinda the point of putting it there…shame it didn’t pan out.

  19. If I were a New York real estate developer, I would worry a lot about my investments there, even if I had a day job with the federal government and changed my residence to Florida. And we need those illegal immigrants; they work in construction so we can have those buildings. And the drug dealers are part of the social fabric, doing business with organized crime that support the local real estate developers.

  20. while im sure it can be redeveloped into condo’s/apartments, who in their right mind would want to live in times square! i say this spending my time living in both London and NYC and keeping a residence on the upper east side. as others note i think reopening as another brand once the NY market bounces back in 2021/2022 is the most probable outcome

  21. I stayed there in Summer 2019 and had mixed feelings about it – the public spaces are beautiful but the rooms are pretty basic, aside from the shower and bathroom amenities, which were higher end. However, I am sad to see it go – clearly a ton of money, planning, and effort went into the design and construction of the hotel and seems like a shame to close only 18 months after opening. That said, for Bonvoy loyalists, the W Times Square and Marriott Marquis are directly across the street

Leave a Reply

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Your email address will not be published. Required fields are marked *