Magna Hospitality picks up Sam Chang’s Garment District hotel for $274M

Deutsche Bank gives buyer $185M
By Mary Diduch | March 29, 2019 03:17PM

A rendering of 338 West 36th Street and McSam Hotel Group chairman Sam Chang

A rendering of 338 West 36th Street and McSam Hotel Group chairman Sam Chang

Magna Hospitality Group has closed on its buy of Sam Chang’s newly built hotel in the Garment District.

Sam Chang’s McSam Hotel Group sold the property for $274.3 million, according to property records filed Friday. The parties were reported to have entered contract last month.

Deutsche Bank provided a $185 million refinanced loan to buyer Magna Hospitality Group, headed by CEO Robert Indeglia. The lender declined to comment.

Chang and Rhode Island-based Magna Hospitality did not immediately return requests for comment.

The 570-key, 26-story property, at 338 West 36th Street, received its temporary certificate of occupancy in January. Architect Gene Kaufman, who frequently works with Chang, designed the project, a dual-branded Marriott SpringHill Suites and Marriott Fairfield Inn & Suites.

It’s not the first deal the two have done together this year. In January, Chang, one of the most active hotel developers in the city, sold a development site to Magna Hospitality for $113 million. Chang had bought the site, at 140 West 24th Street, from Extell Development for $61 million in 2017.

Chang, meanwhile, has another hotel underway in the Garment District. Earlier this month, his firm locked down a $160 million refinancing — also from Deutsche Bank — for a 25-story hotel he is constructing at 350 West 39th Street.

As for Deutsche Bank, the lender also refinanced another hotel on Friday — the Public condominium-hotel project at 215 Chrystie Street in the Lower East Side developed by the Witkoff Group and hotelier Ian Schrager.

The transaction comes as hotel trades were up in 2018 compared to the year before, mostly because of some significant trades. Through the end of July 2018, hotel deals were up $906 million year over year to total $2.9 billion, according to hotel data firm STR.

In Manhattan, the hotel market began to turn around last year after struggling to absorb an influx of new rooms coming online, particularly in neighborhoods like the Garment District and Chelsea. Revenue per available room rose 3.4 percent in 2018 year over year — the first positive change in three years, according to STR.