From left: Jay Shah, CEO of Hersha Hospitality, a 2010 rendering of the Hyatt Union Square and Sam Chang of McSam Hotel Group
[Updated 10:54 a.m., June 30, with comments from Ashish Parikh, Hersha’s CFO]
Hersha Hospitality Trust said it agreed to buy the stalled Hyatt Union Square hotel in Manhattan for $104.1 million, or $595,000 per key, from McSam Hotel Group.
The hotel, at 132 Fourth Avenue, between 12th and 13th streets, was originally conceived as a Gene Kaufman-designed hotel for developer Sam Chang, president and CEO of McSam Hotel Group, but was delayed for several years amid a partial stop work order and other construction related problems.
Philadelphia-based Hersha said it will pay $36 million in cash, cancel a $10 million mezzanine loan that it made to the seller, plus interest, and assume two mortgage loans valued at $55 million. Hersha said the deal will close once construction is completed adding that it will not assume any construction or cost overrun risk as part of the deal.