McSam Hotel Group signs $35M refi with State Bank of Texas for new Marriott hotel in Times Square

Sam Chang’s McSam Hotel Group through the entity Sclb 46th Street LLC as borrower signed a refi loan with lender State Bank of Texas valued at $35 million for the 159-unit hotel building (H2) at 223 West 46th Street in Times Square, Manhattan.
The deal closed on February 15, 2023 and was recorded on February 17, 2023. The prior lender was Silver Point Capital which held debt that had an original loan amount of $15 million.The property has 61,892 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $565 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 October 30, 2015, for $1.7 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for State Bank of Texas was Sushil Patel. This is for a new Marriott SpringHill Suites hotel.

The property

The 223 West 46th Street parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,020 square feet. The zoning is C6-5 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 $5.6 million.The most recent loan totaled $15 million and was provided by Silver Point Capital on May 27, 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 one DOB violation and $16,630 in OATH penalties in the last year.

Development

On the lot, there is one active new building construction project for a 159-unit, 48,726 square-foot R-1 building. The project was developed by Andrew Roufail with plans filed June 28, 2019 and permitted September 23, 2020.

The neighborhood

In Times Square, the majority, or 58 percent of the 10 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 had very little sales volume relative to other neighborhoods with $144 million in sales volume in the last two years. For development, Times Square has 1.7 times the average amount of major developments relative to other neighborhoods and is the 16th highest in Manhattan. It had 1.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 17 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 21 commercial properties representing 526,124 square feet of the 1,220,527 square feet. The largest owner is Triumph Hotels, followed by Raizada S. Vaid and then McSam Hotel Group.
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 R-1 building developed 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 19 commercial properties in New York City with 934,309 square feet and a city-determined market value of $214.1 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 98 percent of the 934,309 square feet of built space are hotel properties, with mixed-use properties next occupying 2 percent of the space. The bulk, or 58 percent of the built space, is in Manhattan, with Queens next at 42 percent of the space.

Direct link to Acris document. link