Joseph Sitt’s Thor Equities is in contract to buy the trendy James New York hotel in Soho for $70 million, or $614,000 per key, sources told The Real Deal.
At a time when the city’s hospitality market is soft and dozens of hotels are up for sale but few have traded, PGIM Real Estate, formerly known as Prudential Real Estate Investors, is selling the 114-key, five-star hotel at a loss.
Prudential acquired the property in 2013 for $83.4 million from Brack Capital Real Estate, which developed it in 2010.
The 20-story hotel, located at 27 Grand Street, also has frontage on Sixth Avenue and Thompson Street. The hotel features restaurant David Burke Kitchen and rooftop lounge Jimmy.
A source familiar with the negotiations said Thor is seeking $5 million to $10 million to flip the contract to another firm that would ultimately close on the purchase. That firm, one source said, could be Aby Rosen’s RFR Holding, though TRD couldn’t verify that claim. Representatives for RFR declined to comment.
Jeffrey Davis, who runs JLL’s New York hospitality division, is brokering the deal.
Prudential and JLL declined to comment, while Thor could not be reached.
There are more than 30 New York City hotels currently on the market, including the Park Hyatt at Extell Development’s One57. In the first seven months of 2016, there were only two hotel sales for $200 million or more – a far cry from the nine hotel sales over the same period in 2015, according to Real Capital Analytics.
A source said a hotel like the James New York has limited upside. “The repositioning of the food-and-beverage component into retail is not likely possible as the location has little foot traffic,” the source said.
A man was found dead Monday at the James New York hotel of a suspected drug overdose, DNAinfo reported.
The other James hotel, a four-star property, is in Chicago.