Richard Born of BD Hotels through the entity West 42nd Street Developers, LLC as borrower signed an initial loan with lender Israel Discount Bank valued at $10 million for the fee under the hotel building (H2) at 510 West 42nd Street in Hell’s Kitchen, Manhattan.
As the financing was provided, the partners of the ground tenant entity were fighting among themselves in state court. Landlord BD Hotels is not involved. The suit is a $35 million money judgment concerning an equity stake, filed on January 23, 2023, by Robert W. Roche of Roche Enterprises against Adam Hochfelder, Richard Cohn, Abraham Merchant, Merchants Hospitality, and the Mailman Trust.
The loan closed on August 31, 2023 and was recorded on September 19, 2023. The property has 78,333 square feet of built space and 170,222 square feet of additional air rights for a total buildable of 248,500 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $127 and the price per buildable square foot is $40 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 BD Hotels was Richard Born. The signatory for Israel Discount Bank was Jeremy Romine and Elena Dokianos. This is the first debt BD Hotels has taken on the property.
Richard Born is the ground lessor. His father, the late investor Robert Born, bought the fee position at the property in 1981. At that time the property was ground leased to a hotel operator. That lease was terminated in June 2008, and in 2009 Richard Born as landlord signed a ground lease with a new tenant, hotel developer Ian Simpson Reisner of Parkview Developers, which opened a renovated hotel. Parkview in 2017 assigned the lease to Merchants Hospitality which redeveloped the property again into a 151-key hotel. The current ground lessee entity, 510 W42 Holdings LLC, has an address with the investment firm Roche Enterprises of Illinois. A non-disturbance agreement identifies the ground lessee in care of Parkview Developers. The most recent loan given to the ground tenant, in 2019, was signed by Abraham Merchants of Merchant Hospitality.
Prior sales and revenue
The owners according to the Department of Housing Preservation and Development includes Robert Roche, head officer and Gordon Lustica, site manager. The business entities are Aimbridge Hospitality and 510 W 42 Hotel Operating, Llc.
The hotel building in Hell’s Kitchen has 78,333 square feet of built space and 170,222 square feet of additional air rights for a total buildable of 248,500 square feet according to a PincusCo analysis of city data. The parcel has frontage of 126 feet and is 197 feet deep with a total lot size of 24,850 square feet. The lot is irregular. The zoning is C6-4 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $27 million.
Violations and lawsuits
In addition, according to city public data, the property has received three DOB violations and $8,650 in OATH penalties in the last year.
For the tax lot building, it received its initial certificate of occupancy on August 27, 2012. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.
In Hell’s Kitchen, The bulk, or 39 percent of the 40.6 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 18 percent of the space. In sales, Hell’s Kitchen has 3.9 times the average sales volume among other neighborhoods with $1.4 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Hell’s Kitchen is the 8th most active neighborhood among other neighborhoods. It had 4.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space.
On this tax block, PincusCo has identified the owners of three of the eight commercial properties representing 489,763 square feet of the 615,167 square feet. The largest owner is Empire State Realty Trust, followed by Consolidated Edison and then BD Hotels.
There are no active new building construction projects on this tax block.
The majority, or 73 percent of the 615,167 square feet of built space are elevator buildings, with hotel buildings next occupying 13 percent of the space.
The PincusCo database currently indicates that BD Hotels owned at least 16 commercial properties with 111 residential units in New York City with 1,125,443 square feet and a city-determined market value of $402.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 99 percent of the 1,125,443 square feet of built space are hotel properties, with walkup properties next occupying 1 percent of the space. They are all located in Manhattan.
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