Letap Group signs contract to buy from McSam Hotel Group LIC hotel project

Letap Group as buyer signed a contract to pay an undisclosed amount to McSam Hotel Group through the entity Hkoq LLC for hotel building (H2) at 38-04 11th Street in Long Island City, Queens.
On the lot, there is one active new building construction project for a 181-unit, 53,606 square-foot R-1 building. The project was developed by Chang Sam with plans filed August 6, 2015 and permitted May 30, 2018.
The deal closed on December 31, 2022 and was recorded on January 6, 2023.
The seller bought the property on December 28, 2017, for $7.8 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for Letap Group was an attorney, Mary Willis White. This is an unfinished hotel project. The memorandum says, “Pursuant to the Contract, Purchaser has deposited with Seller a deposit in the amount of $15,000,000.”

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Letap Group had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller McSam Hotel Group purchased nine properties in two transactions for a total of $9 million and sold six properties in six transactions for a total of $305.6 million over the same time period. The 59,261-square-foot property generated revenue of $5.2 million or $88 per square foot, according to the most recent income and expense figures.

The property

The 38-04 11th Street parcel has frontage of 75 feet and is 113 feet deep with a total lot size of 10,665 square feet. The lot is irregular. 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 $5.5 million.The most recent loan totaled $9 million and was provided by Sterling National Bank on August 19, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $12,400 in ECB penalties and $13,800 in OATH penalties in the last year.

The neighborhood

In Long Island City, the bulk, or 33 percent of the 62.1 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 32 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 5th most active neighborhood among other neighborhoods. It had 8.8 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. There were two 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 four of the 31 commercial properties representing 158,709 square feet of the 347,119 square feet. The largest owner is Surjeet Kaur, followed by McSam Hotel Group and then Hiu Ian Cheng.
On the tax block, there were seven new building construction projects totaling 217,041 square feet. The largest is a 181-unit, 53,606-square-foot R-1 building developed by Chang Sam with plans filed August 6, 2015 and permitted May 30, 2018. The second largest is a 133-unit, 50,457-square-foot R-1 building developed by Ian Cheng with plans filed September 15, 2014 and permitted February 10, 2016.

The majority, or 70 percent of the 347,119 square feet of built space are hotel buildings, with industrial buildings next occupying 27 percent of the space.

The seller

The PincusCo database currently indicates that McSam Hotel Group owned at least 20 commercial properties in New York City with 993,570 square feet and a city-determined market value of $219.6 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 98 percent of the 993,570 square feet of built space are hotel properties, with mixed-use properties next occupying 2 percent of the space. The bulk, or 55 percent of the built space, is in Manhattan, with Queens next at 45 percent of the space.

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