Fairstead buys SRO hotel on UWS for $23M

Park 79 was marketed as a resi conversion

Jul.July 06, 2016 07:30 AM

Fairstead Capital acquired an Upper West Side single-room occupancy hotel known as the Park 79 for $22.5 million, with plans for a residential conversion, sources told The Real Deal.

The deal called for the longtime home of the SRO hotel at 117 West 79th Street to be delivered vacant upon closing. The seven-story hotel holds 108 rooms across 32,100 square feet.

The Midtown East-based multifamily investment firm led by CBRE’s Stephen Siegel and partners announced the purchase Friday, but declined to disclose the price or its plans. The deal closed at the end of June.

Sources said it’s likely that Fairstead will convert the building to rentals.

A Cushman & Wakefield team led by Bob Knakal, Paul Smadbeck and Jonathan Hageman were marketing the property, while Eli Yaghoubi of City Prime Realty represented the buyer. They declined to comment.

The sellers – a partnership between investors David Beit, Larry Goldstein and Blake Augustus – owned the hotel since 1985, property records show.

The two-star property’s SRO status has been a source of contention among the city’s Department of Buildings. The city issued 13 Environmental Control Board violations in November, including one for illegally operating the hotel without a valid certificate of occupancy. That violation has since been resolved. Three of the 13 violations, however, remain.

Rooms at the hotel ranged in rent from $50 to $100 per night, the West Side Rag reported.

Fairstead, which owns and manages about 6,000 rental units in the city, is in contract to sell a 47-building East Harlem portfolio in partnership with E+M Associates for north of $350 million. The firm is also buying the 1,790-unit Savoy Park complex for north of $300 million and, in partnership with Blackstone Group, shopping a piece of the Caiola portfolio.

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