Korman Communities has pulled off a $220 million power move in Midtown, buying BlackRock's majority stake in a cluster of AKA extended-stay hotels and finally taking full control of the portfolio. After years of sharing ownership with institutional partners, the family-run firm now holds the Midtown collection outright.
Deal and portfolio in brief
As reported by The Real Deal, the transaction values the 322-key portfolio at roughly $220 million, working out to about $680,000 per key. The buyout consolidates ownership of the Midtown AKA properties that Korman had long operated in partnership with institutional investors.
Korman's footprint and strategy
Korman Communities, led by Larry and Brad Korman, runs the AKA brand alongside a broader investor-operator platform focused on furnished residences and extended-stay hotels. Company materials say the firm owns more than 10,000 apartments, rooms and suites and manages a multibillion-dollar portfolio, an ambition that helps explain the push to bring these Midtown assets fully in-house, according to Korman Communities.
Who handled the sale
The Real Deal notes that Newmark's capital markets team, led by Adam Spies and Adam Doneger, arranged the deal that bought out BlackRock's majority position and cemented Korman's control of the portfolio. Brokers say these recapitalizations can give operators cleaner lines of authority to plan renovations and set pricing across multiple buildings without navigating a split ownership structure.
Rules that make existing hotels more valuable
The timing is not accidental. The buyout comes as New York tightens the screws on new hotel development. On December 9, 2021, the Department of City Planning adopted the Citywide Hotels Text Amendment, which requires a special permit for most new hotel construction. That extra layer of review can make well-located, already-operating hotels more attractive to owners aiming to protect their market share, per the New York City Department of City Planning.
Labor costs add pressure
At the same time, owning and operating hotels in the city is getting more expensive. The Hotel and Gaming Trades Council and the Hotel Association of New York City recently inked an eight-year contract that covers nearly 30,000 workers. The agreement raises wages by more than 50 percent on average over its term and puts housekeepers on track to earn more than $100,000 a year by the sixth year, according to The Guardian.
What's next for the Midtown portfolio
With full ownership in hand, Korman can roll out one renovation strategy and one operating playbook across the Midtown AKA properties, targeting extended-stay guests without needing sign-off from outside partners on every move. How aggressively owners invest in upgrades, and how much of those costs end up in nightly and monthly rates, will be heavily shaped by the richer labor contract and the city's stricter development rules.
