Hotel owner signs $112.5M refi loan with lender KSL Capital Partners for hotel in Chelsea

Arnold & Porter Kaye Scholer registered through the entity Ny 28th Street LLC as borrower signed a refi loan with lender KSL Capital Partners through the entity Lipan Investments, LLC valued at $112.5 million for the hotel building (H2) at 140 West 28th Street in Chelsea, Manhattan.
The deal closed on February 29, 2024 and was recorded on March 5, 2024. The prior lender was Bank OZK which held debt that had an original loan amount of $92.5 million. The property has 217,166 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $518 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 September 30, 2020, for $147.4 million. The signatory for Arnold & Porter Kaye Scholer registered was Gregory Weingart. The signatory for KSL Capital Partners was Nolen Taylor.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Rhadames Lassis, individual owner and Hector Sanchez, site manager.

The property

The hotel building in Chelsea has 217,166 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 76 feet and is 98 feet deep with a total lot size of 7,570 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $77.7 million. The most recent loan totaled $92.5 million and was provided by Bank OZK on September 30, 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 $5,620 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project for a 531-unit, 146,630 square-foot hotel (R-1) building. The project was submitted by McSam Hotel Group and filed by Sam Chang with plans filed July 28, 2016 and permitted November 9, 2017.

The neighborhood

In Chelsea, The bulk, or 36 percent of the 52.4 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 10th highest sale turnover among other neighborhoods in the city with $1.2 billion in sales volume in the last two years. For development, Chelsea has 1.4 times the average amount of major developments relative to other neighborhoods and is the 20th highest in Manhattan. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of nine of the 30 commercial properties representing 606,646 square feet of the 1,319,636 square feet. The largest owner is United American Land, followed by Ny 28th Street Llc and then Justin Management.
On the tax block, there were three new building construction projects totaling 291,659 square feet. The largest is a 531-unit, 146,630 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Sam Chang with plans filed July 28, 2016 and permitted July 20, 2017. The second largest is a 236-unit, 125,729 square-foot hotel/dormitory/shelter (R-1) building submitted by Frank Ng and filed by Frank Ng with plans filed July 12, 2017 and permitted January 2, 2019.

The majority, or 60 percent of the 1.3 million square feet of built space are office buildings, with hotel buildings next occupying 28 percent of the space.

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