The Real Deal New York

European hotel group links up with Largo to bring art-inspired hotel to West Chelsea

Joint venture bought development site for $42M
By Mary Diduch | March 15, 2019 06:30PM

538, 540 and 542-544 West 29th Street and PPHE Hotel Group CEO Boris Ivesha (Credit: Google Maps and PPHE)

Brokers Dan Shapiro and Shoy McKen

A Netherlands-based hospitality group is partnering up with a local developer to launch a new hotel in West Chelsea — and its first outside Europe.

PPHE Hotel Group entered a joint venture with Largo to bring a PPHE-branded “art’otel” to Manhattan’s West Chelsea.

The project will be a mixed hotel-and-condominium development, with 98 hotel rooms and 55 condos, PPHE announced Thursday. The partners each have 50 percent interest in the venture, and PPHE said it would manage the hotel once it’s up and running.

PPHE did not immediately answer questions regarding additional details on the project, and Largo, which focuses on luxury and mixed-use real estate in New York City, did not immediately return a request for comment.

This week, the partners closed on the purchase of the assemblage — which consists of three buildings located at 538, 540 and 542-544 West 29th Street — for $42 million. Bank Hapoalim provided $22.15 million in financing for the acquisition, according to PPHE, which also said its pre-construction capital commitment to the venture is $17.6 million.

Dan Shapiro and Shoy McKen of Besen & Associates represented Largo and the seller of 542-544 West 29th Street on the sale of that property, which went into contract in April 2015, a Besen spokesperson said. The remaining properties were eventually added to complete the development site, which has has 74,100 buildable square feet, or a price per buildable square foot of $567.

Each building was owned for decades by separate entities tied to three different individuals: Stephen Kursh, Joseph Saponaro and John McGuire, according to property records.

PPHE has several art’otels, which feature original artwork from artists who also inspire the projects’ interior designs, throughout Europe. Across its portfolio, the brand has 38 hotels and resorts in operation and eight campsites.

“Together with Largo, we will embark on this exciting development project with the aim to own and operate the first art’otel outside of Europe as we look to further expand our presence in major gateway cities,” PPHE’s president and CEO Boris Ivesha said in the statement.