3 East 40th Street
This transaction involves the sale of a leasehold interest — not fee simple ownership — in a 189-key Courtyard by Marriott in Midtown Manhattan, which introduces structural complexity and limits collateral value for any lending position. At $33 million, the deal implies roughly $174,600 per key, a modest figure for Midtown that reflects both the leasehold discount and the seller's motivation to exit an asset that no longer met return thresholds amid rising costs. The Bryant Park/Fifth Avenue corridor remains a high-visibility hospitality submarket with strong leisure and corporate demand, but leasehold assets carry inherent refinancing and extension risk that must be carefully underwritten. DiamondRock is a credible, institutional seller with a transparent disposition rationale, though the absence of a named buyer limits counterparty assessment. Overall, the deal merits moderate interest with heightened diligence on ground lease terms, remaining lease duration, and NOI stability.
Deal Stats
Parties
Seller / Landlord
Jeffrey J. Donnelly - DiamondRock Hospitality Company
DiamondRock Hospitality Company is a publicly traded lodging REIT (NYSE: DRH) with a diversified portfolio of premium hotels and resorts across major U.S. markets; the sale of this leasehold interest reflects a strategic portfolio rationalization driven by rising operating costs and reallocation of capital toward higher-yielding assets.
Score Analysis
Why this score
Leasehold Structure
Leasehold interests carry refinancing risk, extension uncertainty, and lower collateral value compared to fee simple ownership, which constrains financing optionality and long-term asset stability.
Seller Credibility
DiamondRock is an institutional, publicly traded REIT with transparent disposition rationale, reducing counterparty risk and signaling a disciplined portfolio optimization rather than distressed selling.
Per-Key Valuation
At $174,600 per key, the pricing reflects leasehold discount but appears reasonable for Midtown given rising operating costs, though below pre-pandemic Midtown hotel valuations.
Submarket Fundamentals
Bryant Park/Fifth Avenue corridor maintains strong leisure and corporate demand with high visibility, providing consistent revenue generation support.
Buyer Anonymity
Unknown buyer identity prevents assessment of operator quality, financing capacity, and strategic intent, limiting confidence in execution risk.
How to improve
The following actions could meaningfully improve this deal's Homage score. Each suggestion is based on the deal's profile, asset type, and current rating — addressing them before approaching a lender can increase approval likelihood and lower borrowing costs.
Clarify Ground Lease Terms
Obtain full disclosure of remaining lease duration, renewal options, rent escalation clauses, and landlord creditworthiness to model long-term hold viability.
Publish Buyer Identity
Named buyer with demonstrated hotel operating track record and strong balance sheet would reduce execution risk and strengthen confidence scoring.
Benchmark NOI Stability
Provide 3-year historical NOI, current occupancy rates, and RevPAR trends post-pandemic to validate operational sustainability and justify the exit rationale.
Raw Deal Textclick to expand
Submit Growing Financial Partnerships For Over 30 Years. Get Started Deals New York Hotel Sale 3 East 40th Street Daily limit: 10/10 DiamondRock Hospitality Company Sells Leasehold Interest In 189-Room Hotel For $33 Million Leased 2 weeks ago the deal details comps related Summary NEW YORK Asset Type: The leasehold interest in the 189-room Courtyard by Marriott located at 3 East 40th Street, Manhattan, has been sold for $33 million. This hotel asset is strategically positioned on Fifth Avenue, facilitating significant visibility within the market. The transaction reflects the property's status as a valuable asset within the hospitality sector in a prominent area. Summary of transaction details: Property Type: Hotel Transaction Amount: $33,000,000 Address: 3 East 40th Street Market: Manhattan Asset Keys: 189 Seller: Jeffrey J. Donnelly - DiamondRock Hospitality Company Jeffrey J. Donnelly, representing DiamondRock Hospitality Company, facilitated the sale as part of a strategic portfolio cleanup. The decision was based on future capital needs and rising costs, which influenced the assessment that the asset no longer met expected return thresholds. Players All Buyers | Sellers DC DiamondRock Hospitality Company SELLER Details Deal Summary IMAGE: - LEASEHOLD IMAGE: Jeffrey J. Donnelly DATE: 05/04/2026 ADDRESS: 3 East 40th Street MARKET: Manhattan ASSET TYPE: Hotel ~ KEYS: 189 SELLER: Jeffrey J. Donnelly - DiamondRock Hospitality Company SALE PRICE: $33,000,000 NOTE: DiamondRock Hospitality sold its leasehold interest in the 189-room Courtyard by Marriott on Manhattan’s Fifth Avenue for $33 million as part of its portfolio cleanup, citing future capital needs and rising costs as reasons the asset no longer met return thresholds. Email New York | @tradedny These are recently sold deals in the same market as the subject deal. Generated based on this deal No similar profiles found Unlock All Profiles Unlimited deal views Access investor profiles & contacts Exclusive comps & market data These are similar brokers based on this deal No profiles found Enter any address to instantly view nearby comps, investors, brokers, lenders, and a visual map. NEW! Search Mixed Use Hospitality Kimpton Era Midtown New York Opens in Manhattan Namron Hospitality Debuts in NYC With Reopening of 33-Key The William Near Bryant Park Featured Institutional Waldorf Astoria Heads to Market After $1.95B Sale and Luxury Condo Conversion FOR SALE $3,500,000 Prime Mixed-Use Building at 430 Grand Street Brooklyn $1,490,000 Nice Mixed-Use Building on Central Avenue in Brooklyn $3,600,000 Prime Development Site in Williamsburg at 511 Grand Street Thomas Modine Suggestions Analyze deals based on income, expenses, and financing. We automatically filled the calculator with data from the deal you are viewing, fill free to modify it to see how it affects the results. Deal Type SALE LOAN LEASE Purchase Price Loan-to-Value (%) Interest Rate (%) Amortization Period 30 years Loan Term 10 years Operating Income Gross Potential Rent (Annual) Vacancy Rate (%) Operating Expenses (Annual) Property Tax Insurance Maintenance Utilities Management Reserves Reset Net Operating Income (NOI) $0.00 Debt Service Coverage Ratio (DSCR) 0.00x DSCR below 1.0x - deal does not cover debt service Cap Rate 0.00% Cash Flow (Annual) Cash-on-Cash Return Monthly Debt Service Annual Debt Service Is there something missing? Send suggestions We are telling CRE's story Traded is the #1 source for cutting edge CRE transactions & insights. States National Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming News Agents Agencies About About Us FAQ Testimonials Help Help Center Return Policy © 2026 Traded Media LLC . All rights reserved. Terms & Conditions Privacy Disclaimer Cookie Policy Do Not Sell My Info Acceptable Use Sign in to view more deals Create a free account or sign in to continue viewing deals. Forgot password? Continue OR Google Outlook New to Traded? Sign up