McSam Hotel Group signs $28M construction loan for hotel in Times Square

McSam Hotel Group and Gene Kaufman through the entity GK West 47th LLC as borrower signed a renovation construction loan with lender Maxim Capital Group through the entity Maxim Credit Group, LLC valued at $28 million for the conversion of the former office building at 224 West 47th Street in Times Square, Manhattan, into a hotel.

On the lot, there is one active major alteration construction project for a 96-unit, 45,878 square-foot hotel (R-10) building. The project was submitted by Gerald Barad with plans filed September 23, 2014 and permitted November 18, 2021.

The deal closed on March 7, 2024 and was recorded on March 18, 2024. The property has 33,659 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $831 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 signatory for McSam Hotel Group and Gene Kaufman was Sam Chang. Gene Kaufman, the architect, signed for the 99-year ground lease, but Sam Chang is listed as a member as the signatory for tax certiorari.

The property

The office building in Times Square has 33,659 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 32 feet and is 100 feet deep with a total lot size of 3,300 square feet. The zoning is C6-7T which allows for up to 14 times floor area ratio (FAR) for commercial. The city-designated market value for the property in 2022 is $5.4 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 five DOB violations, $5,625 in ECB penalties, and $8,375 in OATH penalties in the last year.

The neighborhood

In Times Square, The majority, or 58 percent of the 10.1 million square feet of commercial built space are office buildings, with hotel buildings next occupying 30 percent of the space. In sales, Times Square has 3.5 times the average sales volume among other neighborhoods with $1 billion in sales volume in the last two years and is the 9th highest in Manhattan. For development, Times Square 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 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of eight of the 17 commercial properties representing 762,612 square feet of the 866,352 square feet. The largest owner is Wharton Properties, followed by Triumph Hotels and then RFR Holding.
On the tax block, there was one new building construction project filed totaling 48,726 square feet. It is a 159-unit, 48,726 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Andrew Roufail with plans filed June 28, 2019 and permitted October 3, 2019.

The majority, or 78 percent of the 866,352 square feet of built space are hotel buildings, with retail buildings next occupying 9 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.
The PincusCo database currently indicates that Gene Kaufman owned at least one commercial property in New York City with 33,659 square feet and a city-determined market value of $5.4 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

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