The Real Deal New York

Sam Chang buying Extell-owned hotel dev site for $60M

McSam filed plans for 45-story tower on West 24th Street
By Mark Maurer | October 05, 2017 01:00PM

Sam Chang, Gary Barnett and 140 West 24th Street (Credit: Google Maps)

Extell Development is in contract to sell a Chelsea development site to Sam Chang for about $60 million, so that the hotel developer can construct a 45-story tower, sources told The Real Deal.

Chang filed plans last month for a 172,640-square-foot hotel on the vacant lot at 140-146 West 24th Street, where two commercial buildings stood just earlier this year.

For Gary Barnett’s firm, the sale marks a relatively quick flip with a profit of more than the triple its purchase price. Extell bought the building at 142-146 West 24th for $9 million in 2014, and then the building at 140 West 24th for $9.2 million in January. The same month Extell closed on the purchase of the second building, it filed demolition plans for both buildings. The property at 140 West 24th was perhaps best known for housing the private music venue and rehearsal space Red Door until shuttering in 2015.

Cushman & Wakefield had been marketing for sale both the 24th Street lot and the adjacent vacant site at 157 West 23rd Street. The block-through sites, located between Sixth and Seventh avenues, are zoned for hotel and office use.

The Kaufman Organization owns the leasehold for 23rd Street, and Edison Properties owns the land.

Chang, who runs Great Neck-based McSam Hotel Group, is set to close on the 24th Street purchase by Nov. 1, sources said. Gene Kaufman, a frequent collaborator of his, is serving as the architect of the hotel, the filing shows.

The 23rd Street parcel, however, is not part of the deal. Patrick Jones, special counsel to McSam, said there is no connection between the pending purchase and the 23rd Street site and that Chang has not filed plans for that property. He declined to comment further.

Cushman’s Bob Knakal and Brock Emmetsburger are representing Extell in the sale. Extell and the brokers declined to comment.

Extell disclosed in a second-quarter filing with the Tel Aviv Stock Exchange in late August that an entity called Extell Limited was in contract to sell the site for $30.5 million to then-unidentified buyer, though sources have said that entity’s interest accounts for roughly half of the total ownership.

The hotel would be located at least 10 blocks south of Chang’s primary domain in the city – the Garment District, where he largely develops mid-size, moderately priced hotels.

Rich Bockmann and Chava Gourarie contributed reporting.