A Howard Johnson Hotel located in downtown Manhattan has sold for $15.4 million in what the buyer claims is New York City’s first-ever securitized tenant-in-common (TIC) deal. Manhattan-based Gemini Real Estate Advisors along with 16 other TIC investors bought the 46-room hotel on the corner of Houston and Forsyth St.

“This is a great time to own a hotel in New York City,” says Will Obeid, president of Gemini Real Estate Advisors, LLC. “The proliferation of condo conversions, as well as the growing number of visitors to New York, has left the city with a growing demand for hotel rooms.”

TICs exploit a 2002 tweaking of the tax law that allows proceeds from the sale of an investment property to be reinvested in a share of another property without incurring capital gains.

That, in turn, has allowed retail investors to diversify their holdings while moving into a decidedly bigger class of real estate such as office towers, shopping centers and other commercial properties.

The total amount of money invested in TICs has jumped from $357 million in 2002 to a projected $4.3 billion by the end of this year, according to the Tenant-In-Common Association.