The North Tribeca rezoning proposal that entered the city’s public review process last week could significantly curb development opportunities for mid-sized hoteliers through a restriction that allows the City Council to block any new project of that kind, according to the Observer. Meanwhile, similar rezoning proposals in the Garment District and in Industrial Business Zones are gaining traction amongst city officials. The push against boutique and limited-service hotels is led by the New York Hotel & Motel Trades Council, and its president, Peter Ward. The union has long been lobbying against the growth of this property type within the city, because their staffs are usually non-union and because they take business away from larger hotels that are a part of the union. The hope is that the City Council would require low-cost hotel developers — like Sam Chang, for one — to allow for unionization before giving them the go-ahead. [NYO]

[more]

The North Tribeca rezoning proposal that entered the city’s public review process last week could significantly curb development opportunities for mid-sized hoteliers through a restriction that allows the City Council to block any new project of that kind, according to the Observer. Meanwhile, similar rezoning proposals in the Garment District and in Industrial Business Zones are gaining traction amongst city officials. The push against boutique and limited-service hotels is led by the New York Hotel & Motel Trades Council, and its president, Peter Ward. The union has long been lobbying against the growth of this property type within the city, because their staffs are usually non-union and because they take business away from larger hotels that are a part of the union. The hope is that the City Council would require low-cost hotel developers — like Sam Chang, for one — to allow for unionization before giving them the go-ahead. [NYO]

[more]

Residents of the Whitehouse hotel were slated to go to housing court yet again today, according to a Curbed tipster. Longtime tenants are taking buyouts, and the remaining residents are heading to court, and, in what seems to be a regular occurrence, meeting with representatives from the Cooper Square Committee and Manhattan Legal Services. Hotel developer Sam Chang has been eyeing the decrepit building, which used to be known as the Bowery. [Curbed]

From left: 337-343 West 39th Street, 320 Pearl Street

From the April issue: “I guess you’re big boys now,” one Wall Street analyst quipped during a recent conference call with Hersha Hospitality Trust honchos Jay and Neil Shah.

Indeed, the brothers have become “big boys” on the country’s biggest stage as they’ve ramped up their company’s focus on New York City hotels.

After taking their family’s modest Harrisburg, Pa., business public in 1999 and expanding it under multiple monikers (Hiltons, Hamptons, Holiday Inns) throughout the Northeast suburbs, the Shah brothers are now betting most heavily on the Big Apple.

Following February’s $164.5 million purchase of three hotels from developer Sam Chang in Times Square, which Hersha financed through the sale of more than 51 million shares of stock, New York now accounts for 27 percent of the decade-old, Philadelphia-based real estate investment trust’s geographic footprint.

Click image for larger version.

Hotel developer Sam Chang’s $164.5 million sale of a three-pack of hotels at 337, 339 and 343 West 39th Street in Times Square to Hersha Hospitality Trust was the largest commercial transaction to close in February, data from PropertyShark.com shows. The second largest was the $110 million sale by an affiliate of developer Heritage Partners at 415 Greenwich Street of three commercial and 31 residential units at the 66-unit condominium conversion project in Tribeca, to an affiliate of California-based real estate investment firm KBS Capital Advisors. The next two largest sales were commercial units. In the first, an affiliate of Avenue Capital Group sold four retail condo units at the 115-unit condo conversion Avonova at 219 West 81st Street to an affiliate of Madison Capital for $26.5 million. In the other, an affiliate of the developer World-Wide Group sold three retail condos at 255 East 74th Street to an affiliate of the Related Companies for $25 million. [more]

Clockwise from top left, a copy of the envelope containing reporter Adam Pincus’ hotel key for a one-night stay at 440 West 41st Street, and interior shots of his hotel room in the building (click image to see larger version)

A Hell’s Kitchen apartment hotel that developer Sam Chang sold earlier this month to Israeli investors is available for single-night stays despite claims by its owner that it would not rent units for less than 30 days at a time.
While the current interpretation of the law on overnight stays in apartment buildings is unclear, experts said in general the particular zoning for this building is not for overnight hotel use and could be construed as illegal.
This reporter spent last night in Metro Apartments, the 13-story building at 440 West 41st Street located between Ninth and 10th avenues, paying just under $200 for a clean, well-furnished room on the fourth floor, which included cable television and wireless internet access, with no room service available (click here to see the reporter’s hotel booking receipt for the one-night stay). Last week, co-owner Ben Suky, a managing member of Livorno Properties, told The Real Deal that he did not rent the units for less than 30 days, and planned to convert the apartment building into an extended-stay hotel. [more]

Hotel developer Sam Chang and 440 West 41st Street (building photo source: PropertyShark)

Hotel developer Sam Chang sold a 13-story Hell’s Kitchen building being operated quietly as a hotel to Israeli investors as part of a complex deal in which Hersha Hospitality Trust took title to a Chang hotel in Tribeca and wiped out nearly $20 million of his development loans.
Chang’s H Forty First Street LLC, sold the Hell’s Kitchen property at 440 West 41st Street for $17.5 million to a company owned by Israeli investors called US Suite on March 5, city property records published Monday show.
Although Chang sold the property March 5, he signed a sales contract Dec. 15 and ceded operations to US Suite on Dec. 22, when he signed over a net lease on the property, city records show. [more]

From left: Sam Chang and the three hotels at 343, 339 and 337 West 39th Street, respectively

Prolific hotel developer Sam Chang sold a trio of attached hotels south of Times Square to Pennsylvania-based hotel owner Hersha Hospitality Trust for $164.5 million.

The three buildings at 337, 339 and 343 West 39th Street, between Seventh and Eighth avenues, were constructed together, but operate under different flags.

All three properties went into contract in November and closed Feb. 9, city property records published today show.

Hersha Hospitality raised $110 million for the purchase of the 184-room Hampton Inn at 337 West 39th Street which sold for $55.9 million and the 188-room Candlewood Suites at 339 West 39th Street for $50.8 million.
[more]

Morris Moinian at The Real Deal’s offices

Hotel Indigo, the colorful 122-room newcomer to the Chelsea scene, may soon get a trio of siblings to the north, south and east.

Hotel owner Morris Moinian, 48 — not to be confused with his older real estate developer brother, Joseph, 55 — unveiled the newly-constructed 127 West 28th Street hotel, part of the InterContinental brand, in October, and is now plotting three more Indigo-franchised hotels in Manhattan over the next three to four years, he told The Real Deal yesterday in an in-office interview.

Moinian is president and founder of Fortuna Realty Group, the private real estate company that developed the Dylan Hotel (sold to the HOTUSA Group and Losan Hotels World for $78 million in 2007) and has holdings in New York City, Florida, California and the Caribbean. The Iranian developer said he’s eyeing Tribeca-Soho, the Upper East Side, and Midtown, near Grand Central Terminal, for Indigo’s next landing spots. Ideally, the hotels will be built from the ground up, with 100 to 150 units apiece, he said. [more]

Sam Chang is selling the Hampton Inn at 337 West 39th Street and the Candlewood Suites at 339 West 39th Street

Hersha Hospitality Trust, a Pennsylvania real estate investment trust, plans to spend $110 million it raised as part of a public offering last week to buy two Midtown hotels developed by Sam Chang, according to an announcement from the investment company last week.

Hersha will pay $54.3 million for the purchase of the 184-room Hampton Inn at 337 West 39th Street and $55.5 million for the 188-room Candlewood Suites next door at 339 West 39th Street, documents filed with the U.S. Securities and Exchange Commission show.

The purchase price of $110 million for the 372 rooms comes to a cost of $295,698 per room. The two hotels, as well as a third hotel, a 210-room Holiday Inn Express at 343 West 39th Street, all between Eighth and Ninth avenues, were developed by Chang’s McSam Hotel Group and opened in July 2009, and were expected to be sold together last summer to Hersha. Chang said in an interview today his company was still operating the third hotel at 343 West 39th Street, which remained available for sale. And he said he will not make money on the sale of the two hotels when they do close. “Pretty much we probably broke even. Maybe lost a little money,” he said. [more]