search

The Real Deal Logo

Trending

Lawmakers reach sweeping housing deal with “good cause eviction,” new 421aLawmakers reach sweeping housing deal with “good cause eviction,” new 421aDavid Werner strikes $115M deal to snap up 100 Wall Street at big discountDavid Werner strikes $115M deal to snap up 100 Wall Street at big discountMarty Burger’s new venture sputters on takeoffMarty Burger’s new venture sputters on takeoffCharles Cohen’s 750 Lex value slashed by 83%, foreclosure loomsCharles Cohen’s 750 Lex value slashed by 83%, foreclosure looms
Popular
New York

Group of hoteliers closes on $250M purchase of Hotel Chelsea

Sean MacPherson, BD Hotels team up for acquisition, redevelopment

<em>From left: Richard Born, the Hotel Chelsea and Sean MacPherson</em>
From left: Richard Born, the Hotel Chelsea and Sean MacPherson

A group of hoteliers has purchased the famed Hotel Chelsea for $250 million.

The joint venture includes BD Hotels’ [TRDataCustom] Richard Born, Ira Drukier and frequent collaborator Sean MacPherson, representatives for the new owners announced Monday. The group plans to redevelop the property as a hotel and condominiums. The ownership entity, SIR Chelsea LLC, is an acronym for the new owners’ first names: Sean, Ira and Richard.

BD Hotels took over renovations this past summer. The Real Deal reported in July that the boutique hotelier had purchased a stake in the property, but the other investor hadn’t yet been identified.

Wells Fargo provided financing for the purchase, which closed Oct. 28. Holland & Knight’s James Spitzer represented the buyers as their legal counsel in the deal. He said BD has a stake in the joint venture and will serve as the developer and manager of the hotel. MacPherson and BD have teamed up a number of times on hotel projects in the city, including the Bowery, Ludlow and Maritime hotels. BD teamed up with MacPherson to renovate the Marlton Hotel, which Born called a “mini Chelsea.”

Sign Up for the undefined Newsletter

“This is restoring a great iconic property in the city of New York. We think Sean is the best person for the job,” he said.

BD Hotels confirmed in July that it would take over renovations and manage the hotel. The company’s involvement followed the exit of Ed Scheetz in March. He parted ways with other owners — investor Bill Ackman, Leucadia National Corp. chairman Joseph Steinberg and real estate investment firm Wheelock Street Capital — who began talks with BD Hotels.

Over the past few months, the hotel has continued to be at the center of clashes between the new owners and tenants. The city’s Department of Buildings issued a partial work-stop order at the building due to an inadequate tenant-protection plan. Born on Monday called the issue an “insignificant speed bump” in the renovation process.

“We believe that we’ve made peace with virtually every tenant. There are maybe two or three tenants who are still having issues,” he said. “We’re dealing with a monumental city landmark. We have gone through caused as little inconvenience as possible.”

The new owners expect the hotel renovations to be completed by 2018.