Chang to sell West 39th Street three-pack

By Catherine Curan | July 17, 2009 11:07AM

Hotel developer Sam Chang has finally lined up a buyer for his three-pack of budget hotels on West 39th Street, The Real Deal has learned.

Chang and his company’s COO Gary Wisinski of McSam confirmed they have a deal in the works that’s set to close next month for the three hotels in one building with separate entrances at 337, 339 and 343 West 39th Street.

Sources said the buyer is Hersha Hospitality, a Philadelphia-based, publicly traded REIT and an affiliate of the Hersha Trust, which has partnered with McSam before. Last year, Chang boasted to The Real Deal that he and all the Hersha Hospitality Management partners have similar large diamond rings and diamond-encrusted Rolexes. Chang denied Hersha is the buyer, but noted he has signed a strict confidentiality agreement related to the sale.

He remained tight-lipped about terms and pricing, but it is clear that hotel values are plummeting along with room and occupancy rates, and the sector has yet to hit bottom. Despite the woes, thousands of new rooms, including many in this district pioneered by Chang, are still coming online.

These hotels add 580 more rooms to Manhattan’s mix with their long-delayed debut. The Hampton Inn at 337 West 39th Street opened on Tuesday afternoon. The following day, the hotel had 150 rooms available, out of 184, or an occupancy level of just 20 percent.

A Candlewood Suites with 186 rooms was set to open today at 339 West 39th Street, and a Holiday Inn with 184 rooms is slated to bow on Monday at 343 West 39th Street.

Hersha did not immediately respond to a request for comment. The company has been very active in the New York market lately. Earlier this year, Hersha lined up financing for a boutique hotel on Lexington Avenue and East 48 Street, and has acquired and opened three other new hotels, including Downtown Brooklyn’s first boutique hotel, the Nu.