The Real Deal New York

Highgate, Isaac Chetrit to buy Affinia Manhattan NYC for $218M

618-key hotel across from Penn Station was part of Pebblebrook-Denihan split

November 04, 2016 11:30AM
By Mark Maurer

Highgate Holdings co-founder Mahmood Khimji (credit: Steve Friedman) and the Addnia Manhattan

Highgate’s Mahmood Khimji (credit: Steve Friedman) and the Affinia Manhattan NYC (credit: Affinia)

Highgate, in partnership with Isaac Chetrit’s AB & Sons and Ray Yadidi’s Sioni Group, is in contract to acquire the 618-key Affinia Manhattan NYC hotel in Midtown’s Penn Plaza district for $217.5 million, sources told The Real Deal.

The 28-story, 474,000-square-foot building at 373 Seventh Avenue was one of six Manhattan hotels at the center of a recent split between Pebblebrook Hotel Trust and Denihan Hospitality Group.  Pebblebrook, a Maryland-based real estate investment trust, walked away with the Affinia Manhattan and the 252-key Dumont NYC. But the REIT had no plans of retaining its New York City assets and therefore hired Eastdil Secured TRData LogoTINY and Hodges Ward Elliott to market both of them for sale.

Highgate, the Midtown- and Texas-based real estate investment firm co-founded by Mahmood Khimji, will serve as the property manager of the Manhattan NYC.

The deal went under contract earlier this week and is expected to close by year’s end for about $350,000 per key or $460 per square foot, sources said.

The four-star hotel was built in 1929 as the Governor Clinton. It is located at the corner of West 31st Street, across from New York Penn Station. Hotel room rates start at $197 per night.

Eastdil Secured’s Lawrence Wolfe and Michele Mahl and Hodges Ward Elliott’s Mark Elliott, Jeff Berkman and Jay Morrow are jointly representing the seller in the deal.

Representatives for Sioni and Eastdil declined to comment, while Highgate, Chetrit, Hodges Ward Elliott could not be immediately reached.

Unlike Pebblebrook, Denihan, a Midtown-based family firm, is planning to hold the other four hotels in the portfolio long-term.

Isaac Chetrit, a cousin of Joseph Chetrit who runs AB & Sons with brother Eli and son Abraham, and Ray Yadidi, who runs Sioni Group with his brother Jack, are both active in Midtown’s Garment District. Together, they are planning a skyscraper as high as 80 stories on Sixth Avenue.

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