Priyank Patel of LeTap Group pays $55.6M to Sam Chang for LIC hotel

Priyank N. Patel of the LeTap Group through the entity 9th Street Hospitality Propco LLC paid $55.6 million to Sam Chang’s McSam Hotel Group through the entity LGR 9th Street LLC for the hotel building (H3) at 38-21 9th Street in Long Island City, Queens. The expected use is cash flowing.
The deal closed on September 20, 2024 and was recorded on September 25, 2024. The property has 87,763 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $633 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 seller bought the property on June 8, 2018, for $6.5 million then constructed the hotel. The signatory for McSam Hotel Group was Sam Chang. The signatory for Priyank N. Patel, who often partners with Jasmin Patel, was Priyank Patel. The contract date was May 24, 2024. Priyank Patel and Jasmin Patel own several hotels in New York City including 16 East 30th Street in NoMad; and 38-60 13th Street, and 38-11 10 Street, both in Long Island City.
The buyers financed the purchase with a $36.1 million acquisition loan from State Bank of Texas.

Prior sales and revenue

The seller McSam Hotel Group had not purchased any other properties and sold nine properties in eight transactions for a total of $785.8 million over the past 24 months.

The property

The hotel building in Long Island City has 87,763 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 98 feet and is 100 feet deep with a total lot size of 9,983 square feet. 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 $17.3 million. The most recent loan totaled $21.3 million and was provided by Goldman Sachs on March 13, 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 two DOB violations and $1,300 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.2 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 31 percent of the space. In sales, Long Island City has the 6th highest sale turnover among other neighborhoods in the city with $1.1 billion in sales volume in the last two years. For development, Long Island City has 4 times the average amount of major developments relative to other neighborhoods and is the highest in Queens. It had 4.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of five of the 24 commercial properties representing 297,745 square feet of the 373,484 square feet. The largest owner is McSam Hotel Group, followed by Riverbrook Equities and then Ion Ghegeliu.
On the tax block, there were three new building construction projects totaling 88,960 square feet. The largest is a 248-unit, 73,644 square-foot hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed by Chang Sam with plans filed April 12, 2016 and permitted August 31, 2018. The second largest is a 32-unit, 12,585 square-foot hotel/dormitory/shelter (R-1) building submitted by Jewel Saeed with plans filed December 5, 2014 and it has not been permitted yet.

The majority, or 77 percent of the 373,484 square feet of built space are hotel buildings, with industrial buildings next occupying 18 percent of the space.

The seller

The PincusCo database currently indicates that McSam Hotel Group owned at least 25 commercial properties in New York City with 1,180,743 square feet and a city-determined market value of $268.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 93 percent of the 1,180,743 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 buyer

The PincusCo database currently indicates that Jasmin Patel owned at least three commercial properties in New York City with 141,273 square feet and a city-determined market value of $28.8 million. (Market value is typically about 50% of actual value.) The portfolio has $49.9 million in debt, borrowed from Metro City Bank and Dime Community Bank. Within the portfolio, all identified are hotel properties. The bulk, or 64 percent of the built space, is in Queens, with Manhattan next at 36 percent of the space.

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