The Real Deal New York

Sam Chang buys ground lease on Garment District retail strip

Hotelier could be planning new building on site, which offers 75K buildable sf

June 07, 2016 05:42PM
By Rey Mashayekhi

523 Eighth Avenue

523-529 Eighth Avenue in the Garment District (credit: CoStar) (inset: Sam Chang)

Hotelier Sam Chang’s latest play is in the Garment District, where he just acquired a 99-year ground lease on a one-story retail strip for $27.1 million, according to property records filed with the city Monday.

Chang’s McSam Hotel Group closed May 19 on the purchase of a ground lease at 523-529 Eighth Avenue, near the corner of West 36th Street.

Bryant Park-based landlord Joseph P. Day Realty Corp owns the property, which holds a row of five retail units spanning more than 7,400 square feet.

But the site also holds nearly 75,000 buildable square feet, potentially making it ripe for the Great Neck-based investor’s latest Manhattan hotel development. McSam has yet to file a permit application for demolition or for a new building.

Chang also has a right of first offer to purchase 523-529 Eighth Avenue outright under the terms of its lease agreement, according to the memorandum of lease filed with the city.

Neither McSam nor Joseph P. Day returned requests for comment.

Chang is no stranger to the Garment District. Among the five new, ground-up hotel developments he’s teaming with Marriott to build is a “two-pack” project at 338 West 36th Street, which will hold both a 286-key Marriott Fairfield Inn & Suites and a 280-key Marriott SpringHill Suites.

The hotelier also filed plans last year for two new Garment District hotels located next door to each other — a 25-story, 175-key hotel at 338 West 39th Street and a 21-story, 400-key hotel at 350 West 39th Street.

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