Extell Development files plans for 208-unit hotel in Midtown West, site leased from BD Hotels

Extell Development, led by Gary Barnett, filed plans Friday for a 208-unit hotel at 871 Seventh Avenue in Midtown West, Manhattan, on a parcel currently occupied by the Hotel Wellington. PincusCo reported last fall that Extell was in late negotiations to sign a ground lease as a tenant with landlord BD Hotels.
David Rothstein of Extell Development submitted the new building construction project for a 208-unit, 214,032 square-foot hotel for the property at the southeast corner of Seventh Avenue and 55th Street.

Extell is one of the most active developers in New York City. The PincusCo database currently indicates that Extell Development owned at least 54 commercial properties in New York City with 3,251,436 square feet. The portfolio has $5.4 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and Prudential Credit Opportunities respectively. Within the portfolio, the bulk, or 34 percent of the 3,251,436 square feet of built space are elevator properties, with specialty properties next occupying 33 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 3 percent of the space.

The plan was filed with the New York City Department of Buildings on April 14, 2023 under job number M00847788. It calls for the construction of a 27-story building. The project is described in the filing as: “per HUB consultation, proposed construction for as-of-right new building high-rise hotel as per plans filed herewith. The architect is Beyer Blinder Belle.

The hotel building in Midtown West has 207,700 square feet of built space and 14,677 square feet of additional air rights for a total buildable of 222,390 square feet according to a PincusCo analysis of city data. The parcel has three buildings with frontage of 125 feet and is 175 feet deep with a total lot size of 22,239 square feet. The lot is irregular. The zoning is C6-6 which allows for up to 15 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 $92.3 million.

Prior sales and revenue

This property was ground leased by BD Hotels for a value of $94.5 million to Extell Development, according to a memorandum of lease dated October 19, 2022.

The 207,700-square-foot property generated revenue of $37.2 million or $179 per square foot, according to the most recent income and expense figures.
Development

David Rothstein of Extell Development submitted a new building construction project for a 208-unit, 214,032 square-foot 70 building at 871 7 Avenue. The plan was filed on April 14, 2023. It calls for the construction of a 403-foot tall, 27-story building and was filed with the New York City Department of Buildings under job number M00847788. The project is described in the filing as: per hub consultation, proposed construction for as-of-right new building high-rise hotel as per plans filed herewith.
Violations and lawsuits

According to city public data, the property has received two DOB violations, $6,280 in ECB penalties, and $6,630 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.
The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Midtown West is the 2nd most active neighborhood among other neighborhoods. It had 15.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 21 percent of the neighborhood’s built space.
The block

On this tax block, PincusCo has identified the owners of seven of the eight commercial properties representing 1,275,201 square feet of the 1,456,704 square feet. The largest owner is Empire Hotel Group, followed by Extell Development and then Gp Properties. On the tax block, there were two new building construction projects totaling 289,115 square feet. The largest is a 208-unit, 214,032 square-foot 70 building submitted by David Rothstein with plans filed April 14, 2023 and it has not been permitted yet. The second largest is a 75,083 square-foot business (B) building submitted by Savanna and filed by Eric Desimone with plans filed March 28, 2017 and permitted December 20, 2017.
The owner

The owners according to the Department of Housing Preservation and Development includes Richard Born, head officer and Ira Drukier, officer. The business entity is Wellington Hotel Co.
The surrounding

Within a 400-foot radius of 861 7 Avenue, PincusCo identified three commercial real estate items of interests occurred over the past 24 months. Of those three items, one was in new building development. It was a new building permit application filed on April 28, 2021 for a 185,298-square-foot hotel/dormitory/shelter (R-1) building with 400 residential units at 201 West 54th Street. Of those three items, two were loans above $5 million totaling $166 million. The most recent of the two was Abu Dhabi Investment Authority in which borrowed $154 million from First Abu Dhabi Bank secured by the 634,793-square-foot, three-unit hotel (H1) on 151 West 54th Street on January 4, 2023.

Direct link to the property’s ACRIS page and link to DOB NOW portal.