Gehr Group cuts debt to $18.2M at Garment District hotel with MidFirst Bank
David Lifschitz’s Gehr Group through the entity Times Square Hospitality II, LLC as borrower signed a refi with lender MidFirst Bank valued at $18.2 million for the hotel building (H2) at 330 West 40th Street in Garment District, Manhattan. The hotel operating in the building is the Fairfield Inn & Suites by Marriott New York Manhattan/Times Square. This Gehr Group entity controls the property though a ground lease, with another Gehr Group entity operating as the fee owner, Times Square Hospitality Fee II, LLC.
The deal closed on April 2, 2024 and was recorded on April 30, 2024. The prior lender was MidFirst Bank which held debt that had an original loan amount of $27 million.
The property has 102,000 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $178 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 owner bought the property on February 12, 2009, for $99.5 million. The signatory in this recent loan for Gehr Group was David Lifschitz.
Prior sales and revenue
The owners according to the Department of Housing Preservation and Development includes David Lifschitz, head officer and Helen Guon, site manager. The business entities are Real Hospitality Group, Llc and Times Square Hospitality II, Llc.
The property
The hotel building in Garment District has 102,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 98 feet deep with a total lot size of 4,937 square feet. 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 $37.4 million.
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 $1,285 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 Garment District, The majority, or 69 percent of the 51.8 million square feet of commercial built space are office buildings, with hotel buildings next occupying 12 percent of the space. In sales, Garment District has 1.7 times the average sales volume among other neighborhoods with $472.1 million in sales volume in the last two years and is the 18th highest in Manhattan. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 7.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.
The block
On this tax block, PincusCo has identified the owners of 13 of the 31 commercial properties representing 978,689 square feet of the 1,572,885 square feet. The largest owner is McSam Hotel Group, S.W. Management and Son Dinh Tran.
On the tax block, there were seven new building construction projects totaling 339,482 square feet. The largest is a 612-unit, 177,581 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Sam Chang with plans filed March 21, 2014 and permitted August 14, 2014. The second largest is a 120-unit, 44,430 square-foot hotel/dormitory/shelter (R-1) building submitted by Brian Law with plans filed September 10, 2015 and it has not been permitted yet.
The majority, or 71 percent of the 1.6 million square feet of built space are hotel buildings, with office buildings next occupying 19 percent of the space.
The borrower
The PincusCo database currently indicates that Gehr Group owned at least one commercial property in New York City with 98,738 square feet and a city-determined market value of $41.6 million. (Market value is typically about 50% of actual value.) The portfolio has $54.5 million in debt, borrowed from Guardian Life Insurance Company of America. The portfolio consists of at least a single hotel property. It is located in Manhattan.
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