Sam Chang’s McSam Hotel Group sells newly built LIC hotel for $40.5M to Jasmin Patel

Jasmin Patel through the entity LIC Investors I LP paid $40.5 million to Sam Chang’s McSam Hotel Group through the entity Hkoq LLC for the newly built, 181-unit hotel building (H3) at 38-04 11th Street in Long Island City, Queens.

This is a new building construction project for a 181-unit, 53,606 square-foot hotel (R-1) building. The project was submitted by McSam Hotel Group and filed by Sam Chang with plans filed August 6, 2015 and permitted May 30, 2018.

The sale closed on March 22, 2024 and was recorded on March 28, 2024. The property has 59,261 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $683 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 was Sam Chang. The signatory for Jasmin Patel was Jasmin Patel. The contract date was December 31, 2022.
The purchase was financed with a $25 million from Metro City Bank.
Sam Chang bought the property on December 28, 2017, for $7.8 million.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Jasmin Patel purchased one property that was facing foreclosure for of $17 million and has no record she sold any properties over the past 24 months.
The seller McSam Hotel Group had not purchased any other properties and sold eight properties in seven transactions for a total of $745.3 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 hotel building in Long Island City has 59,261 square feet of built space according to a PincusCo analysis of city data. The 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 $11.2 million. The most recent loan totaled $7.9 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 for the past 24 months. In addition, according to city public data, the property has received $875 in OATH penalties in the last year.

Development

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.1 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 8th highest sale turnover among other neighborhoods in the city with $1.3 billion in sales volume in the last two years. For development, Long Island City is the 7th most active neighborhood among other neighborhoods. It had 6.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the 31 commercial properties representing 198,408 square feet of the 347,119 square feet. The largest owner is Letap Group, followed by John Venetis 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 hotel/dormitory/shelter (R-1) building submitted by McSam Hotel Group and filed 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 hotel/dormitory/shelter (R-1) building submitted by Ian Cheng and filed 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 21 commercial properties with 17 residential units 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 two commercial properties in New York City with 82,012 square feet and a city-determined market value of $17.6 million. (Market value is typically about 50% of actual value.) The portfolio has $24.9 million in debt, borrowed from Dime Community Bank. Within the portfolio, all identified are hotel properties. The bulk, or 62 percent of the built space, is in Manhattan, with Queens next at 38 percent of the space.

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