Three Sam Chang-developed hotels in Manhattan sell for $206.5M

Three anonymous entities each in care of the law firm Arnold & Porter Kaye Scholer and likely purchased by the same investor, acquired three hotels on December 8, 2023, that Sam Chang’s McSam Hotel Group developed in Midtown West, Penn Plaza and the Garment District.

Though Sam Chang was involved in the development of the three properties, he was the seller signatory for two of them, the DoubleTree by Hilton New York Midtown Fifth Ave at 25 West 51st Street in Midtown West and the Fifth Avenue Hotel at 292 Fifth Avenue in Penn Plaza. The signatory for the third hotel, the Hyatt Centric Midtown 5th Avenue New York at 16 East 39th Street in Grand Central was Samir Gandhi of M&R Hotel Management

The three purchase entities have the same contract and closing dates, which are all on December 8, 2023, and share the same buyer signatory.

Arnold & Porter was also the law firm in care of several hotels that Magna Hospitality Group purchased in New York.

In the first transaction, Do-Rock 51st St. LLC paid $78.9 million to McSam Hotel Group through the entity Sccq Rock Hotel LLC for the hotel condo at 25 West 51st Street in Midtown West, Manhattan and hotel condo at 25 West 51st Street in Midtown West, Manhattan.
The deal closed on December 8, 2023 and was recorded on December 14, 2023. The two properties have 91,588 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $861 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 Do-Rock 51st St. LLC was Jennifer Adams Shepler. The contract date was December 8, 2023. This is the DoubleTree by Hilton New York Midtown Fifth Ave.

Lo5mad LLC paid $76.3 million to McSam Hotel Group through the entity Wdsa 5th Avenue LLC for the 17-unit hotel building (H9) at 292 5th Avenue in Penn Plaza, Manhattan.
The deal closed on December 8, 2023 and was recorded on December 14, 2023. The property has 78,211 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $976 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 March 28, 2017, for $42.4 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for Lo5mad LLC was Jennifer Adams Shepler. The contract date was December 8, 2023. This is the Fifth Avenue Hotel.

Hmad 39th St, LLC paid $51.3 million to M&R Hotel Management through the entity 16 East 39th Street LLC for the hotel building (H2) at 16 East 39th Street in Grand Central, Manhattan.
The deal closed on December 8, 2023 and was recorded on December 14, 2023. The property has 82,634 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $620 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 February 19, 2016, for $31.9 million. The signatory for M&R Hotel Management was Samir R. Gandhi. The signatory for Hmad 39th St, LLC was Jennifer Adams Shepler. The contract date was December 8, 2023. This is the Hyatt Centric Midtown 5th Avenue New York.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 25 West 51st Street.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller McSam Hotel Group had not purchased any other properties and sold five properties in five transactions for a total of $526 million over the same time period.

The property

The hotel condo in Midtown West has 91,588 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 68,282 square feet. The city-designated market value for the property in 2022 is $19 million. The most recent loan totaled $203 million and was provided by Oak Hill Advisors on December 30, 2021.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. 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 Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 19.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 25 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 the tax block of 25 West 51st Street, PincusCo has identified the owners of six of the seven commercial properties representing 3,161,234 square feet of the 3,209,955 square feet. The largest owner is Women’s National Republican Club, followed by Wharton Properties and then Vornado Realty Trust.
There are no active new building construction projects on this tax block.

The majority, or 98 percent of the 3.2 million square feet of built space are office buildings, with hotel buildings next occupying 1 percent of the space.

The seller

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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