Bayrock Capital pays $76.5M to McSam Hotel Group for hotel in Long Island City

Bayrock Capital through the entity BR 10th Street Partners LLC paid $76.5 million to Sam Chang’s McSam Hotel Group through the entity Dun 37-10 10th Street LLC for the 381-key hotel building (H3) at 37-10 10th Street in Long Island City, Queens.
This purchase follows Bayrock Capital’s $50 million purchase of a hotel from Moinian Group.
The deal closed on May 16, 2023 and was recorded on May 25, 2023. The property has 113,418 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $674 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The seller bought the property on July 18, 2018, for $11.5 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for Bayrock Capital was Daniel Rabinowitz.

To finance the transaction, Bayrock Capital through the entity BR 10th Street Partners LLC as borrower signed an acquisition loan with lender Broadview Capital valued at $42 million for the hotel building (H3) at 37-10 10th Street in Long Island City, Queens. The deal closed on May 16, 2023 and was recorded on May 25, 2023. The prior lender was Goldman Sachs which held debt that had an original loan amount of $29 million. The property has 113,418 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $370 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.) The signatory for Bayrock Capital was Daniel Rabinowitz. The signatory for Broadview Capital was Lawrence Andelsman.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Bayrock Capital purchased seven properties in six transactions for a total of $80.9 million and has no record it sold any properties over the past 24 months.
The seller McSam Hotel Group sold seven properties in seven transactions for a total of $305.6 million over the same time period. The 113,418-square-foot property generated revenue of $11 million or $97 per square foot, according to the most recent income and expense figures.

The property

The hotel building in Long Island City has 113,418 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 100 feet deep with a total lot size of 20,000 square feet. The zoning is M1-3 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $29.6 million. The most recent loan totaled $29 million and was provided by Goldman Sachs on March 13, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received three DOB violations and $935 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.1 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 31 percent of the space. In sales, Long Island City has the 9th highest sale turnover among other neighborhoods in the city with $1.7 billion in sales volume in the last two years. For development, Long Island City is the 4th most active neighborhood among other neighborhoods. It had 9.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the 15 commercial properties representing 120,418 square feet of the 182,854 square feet. The two identified owners are McSam Hotel Group and Antonis Politis.
On the tax block, there was one new building construction project filed totaling 47,719 square feet. It is a 47,719 square-foot business (B) building submitted by Xinos Construction and filed by Andon Iksino with plans filed August 24, 2015 and it has not been permitted yet.

The majority, or 62 percent of the 182,854 square feet of built space are hotel buildings, with industrial buildings next occupying 34 percent of the space.

The seller

The PincusCo database currently indicates that McSam Hotel Group owned at least 21 commercial properties in New York City with 1,260,502 square feet and a city-determined market value of $293.2 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 96 percent of the 1,260,502 square feet of built space are hotel properties, with industrial properties next occupying 3 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Queens next at 30 percent of the space.

The buyer

The PincusCo database currently indicates that Bayrock Capital owned at least 13 commercial properties with 135 residential units in New York City with 297,893 square feet and a city-determined market value of $72 million. (Market value is typically about 50% of actual value.) The portfolio has $145.4 million in debt, with top three lenders as Dime Community Bank, Merchants Capital, and Broadview Capital respectively. Within the portfolio, the bulk, or 73 percent of the 297,893 square feet of built space are hotel properties, with walkup properties next occupying 20 percent of the space. The bulk, or 83 percent of the built space, is in Queens, with Bronx next at 8 percent of the space.

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