McSam Hotel Group signs $120M refi with Deutsche Bank for hotel in Garment District
McSam Hotel Group through the entity NYHK West 40 LLC as borrower signed a refi loan with lender Deutsche Bank valued at $120 million for the Doubletree By Hilton New York Times Square West hotel building (H2) at 350 West 40th Street in the Garment District, Manhattan. This entity, NYHK West 40 LLC, is the ground tenant under a lease with the landlord, another entity controlled by McSam Hotel Group, known as NYHK Fiona LLC.
The deal closed on December 1, 2023 and was recorded on December 14, 2023. The prior lender was Goldman Sachs which held debt that had an original loan amount of $120 million.
McSam Hotel Group’s fee owner entity, NYHK Fiona LLC, in November 2019 borrowed $90 million from UBS.
The property has 200,590 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $598 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 December 20, 2013, for $26.2 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for Deutsche Bank was David Addison and Anthony Pontoriero.
Prior sales and revenue
The owners according to the Department of Housing Preservation and Development includes Michael Boussidan, head officer and Sam Chang, shareholder. The business entity is Nyhk West 40 Llc.
The property
The hotel building in the Garment District has 200,590 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 98 feet deep with a total lot size of 9,875 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 $69.5 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 $8,015 in OATH penalties in the last year.
Development
For the tax lot building, it received its initial certificate of occupancy on January 26, 2017. On the lot, there is one active new building construction project for a 612-unit, 177,581 square-foot R-1 building. The project was submitted by McSam Hotel Group and filed by Sam Chang with plans filed March 21, 2014 and permitted November 6, 2014.
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 $588.9 million in sales volume in the last two years and is the 24th highest in Manhattan. For development, Garment District is the 5th most active neighborhood among other neighborhoods. It had 6.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 12 percent of the neighborhood’s built space. There was one 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 12 of the 31 commercial properties representing 863,772 square feet of the 1,572,885 square feet. The largest owner is Son Dinh Tran, followed by S.W. Management and then Mcsam Hotel Group.
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 Mcsam Hotel Group owned at least 20 commercial properties with 17 residential units in New York City with 1,147,084 square feet and a city-determined market value of $263.5 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 96 percent of the 1,147,084 square feet of built space are hotel properties, with industrial properties next occupying 3 percent of the space. The bulk, or 77 percent of the built space, is in Manhattan, with Queens next at 23 percent of the space.
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