The Real Deal New York

GreenOak partners with Highgate to close Gansevoort Park Avenue deal

The 249-key hotel will now be called Royalton Park Avenue
By Mark Maurer | Twitter_logo_blue copy December 18, 2017 06:34PM

From left: The Gansevoort Park Avenue, Michael Achenbaum and Mahmood Khimji (Credit: Gansevoort and Getty Images)

UPDATED, 4:53 p.m., Dec. 26: GreenOak Real Estate has partnered with Highgate to close on the purchase of the Gansevoort Park Avenue NYC hotel, which is being renamed Royalton Park Avenue.

The 19-story, 249-key hotel at 420 Park Avenue South in NoMad went under contract in an off-market deal for nearly $200 million this fall, as The Real Deal first reported. Highgate, the prolific hotel investor and hospitality firm, will also serve as the hotel’s manager, sources said.

The sellers — Achenbaum family’s Gansevoort Hotel Group, Tawil family’s Centurion Realty and Jeffrey Levine’s Douglaston Development — discussed putting the 214,000-square-foot property on the market this summer.

GreenOak Real Estate, the London-based real estate investment firm led by John Carrafiell, Sonny Kalsi and Fred Schmidt, formed after a joint venture with Highgate after the contract was signed, sources said.

With the sale, only one Gansevoort hotel remains in New York City. The Gansevoort Meatpacking NYC opened in 2004, while the Park Avenue South property opened in 2010.

“While we’ve said goodbye to NoMad, we’re not saying goodbye to NYC,” the Gansevoort Hotel Group said in a statement. “We’ll have new and exciting adventures awaiting you at our Meatpacking location and will start our transition in the new year.”

The deal, which closed late last week, came out to close to $800,000 per key. The former owners previously considered selling the hotel, sources said, with pricing around $1.1 million per key, or about $275 million.

The $800,000 per-key price is nevertheless a notch above several other recent hotel sales — from the Royalton to the James — in the $300,000-to-$550,000 range.

Highgate declined to comment, and GreenOak could not be immediately reached.

Sources said the TAO Group was tapped to re-envision the hotel’s food-and-beverage component.

Highgate intends to expand the Royalton brand, having acquired the Royalton New York hotel with Rockpoint Group for $55 million in August. The Royalton, located at 44 West 44th Street in Midtown, opened as a residential hotel in 1898 and then was converted into a non-residential hotel in 1988. The Park Avenue South property will become the second Royalton hotel.

Highgate, led by Mahmood and Mehdi Khimji, has been an aggressive hotel buyer in New York over the past 12 months. In addition to the Gansevoort Park Avenue and the Royalton, the firm bought the Affinia Manhattan ($217.5 million) — now called the Stewart Hotel — and the Nyma ($52 million) with partners.

(To view more investment sales transactions involving GreenOak Real Estate, click here)