Timeshare Acquisitions signs $42M rehab loan for Roger Smith Hotel in Midtown East

Florida-based Timeshare Acquisitions through the entity Timeshare Acquisitions At Lexington, LLC as borrower signed a rehab construction loan with lender Western Alliance Bank valued at $42 million for the Roger Smith Hotel (H3) at 501 Lexington Avenue in Midtown East, Manhattan.
The deal closed on November 15, 2022 and was recorded on November 22, 2022. The property has 92,501 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $454 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 February 8, 2022, for $41.4 million. The signatory for Timeshare Acquisitions was Bert Blicher. This is a renovation construction loan on top of a $34 million acquisition loan provided when Timeshare bought the property. Timeshare also signed an agreement giving Holiday Inn Club Vacations a right of first refusal to buy the building. Holiday Inn Club Vacations bought two adjacent four-story buildings which are described in the agreement as a development parcel on February 8, 2022, the same day Timeshare bought the corner hotel.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes James Knowles, head officer and Craig Russell, site manager. The business entity is Unit No 3 Corp.

The property

The 501 Lexington Avenue parcel has frontage of 100 feet and is 100 feet deep with a total lot size of 6,050 square feet. The lot is irregular. The zoning is C5-3 which allows for up to 15 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 $18.1 million.The most recent loan totaled $34 million and was provided by Western Alliance Bank on February 8, 2022.

Violations and lawsuits

The property was involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $3.2 million money judgment concerning a loan filed on June 6, 2022, by Phoebe Knowles and James Knowles against Namdar Realty Group. In addition, according to city public data, the property has received $3,300 in OATH penalties in the last year.

The neighborhood

In Midtown East, the majority, or 82 percent of the 61.5 million square feet of commercial built space are office buildings, with hotel buildings next occupying 7 percent of the space. In sales, Midtown East has the 2nd highest sale turnover among other neighborhoods in the city with $3.3 billion in sales volume in the last two years. For development, Midtown East is the most active neighborhood among other neighborhoods. It had 15.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 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 this tax block, PincusCo has identified the owners of seven of the 61 commercial properties representing 826,949 square feet of the 2,158,101 square feet. The largest owner is C-III Capital Partners, followed by USAA Real Estate and then AEW Capital Management.
On the tax block, there was one new building construction project filed totaling 151,836 square feet. It is a 137-unit, 151,836-square-foot R-2 building developed by Bentley Zhao with plans filed March 28, 2016 and permitted August 12, 2021.

the majority, or 64 percent of the 887,831 square feet of built space are hotel buildings, with elevator buildings next occupying 34 percent of the space.

The borrower

The PincusCo database currently indicates that Timeshare Acquisitions owned at least one commercial property in New York City with 92,501 square feet and a city-determined market value of $18.1 million. (Market value is typically about 50% of actual value.) The portfolio has $34 million in debt, borrowed from Western Alliance Bank. The portfolio consists of at least a single hotel property. It is located in Manhattan.

Direct link to Acris document. link