Extell sells interest in Midtown Hotel site
Cambria Suites bought out busy developer for $30 million
Gary Barnett, whose firm Extell Development is the company behind the most talked about condominium project in recent times, One57, is so busy selling units at his famed building that he’s liquidating his interest in other assets. Extell is selling its interest in a prospective hotel development site at 30 West 46th Street to Cambria Suites, an offshoot of the Choice Hotels brand that had contributed equity to the project, sources told The Real Deal.
The deal for the site, on which Extell had once planned a 194-room, 20-story hotel, is currently in contract, Barnett confirmed to The Real Deal. Sources said Cambria will pay $30 million for Extell’s stake in the vacant site, which is just one block away from Extell’s $750 million Gem Tower, which topped out in March.
The purchase will mark Cambria’s first foray into the New York market as an owner; while it owns hotels in other American cities, it appears to have no holdings in New York, sources said. The company was previously tapped as operator and manager for the planned Extell-developed hotel at the site.
In an interview with USA Today last year, Choice CEO Steve Joyce predicted more urban deals for Cambria. He said that industry pros could expect to see more deals from the firm in the coming months, thanks to lenders’ willingness to finance hotel deals. “We are out providing significant seed capital to get deals over the finish line because we’re sensing now is the right time,” he told the newspaper.
Joyce was not immediately available for comment on the Midtown transaction. Sources said that Cambria has a joint venture partner on the deal, but could not specify the partner’s identity.
While Barnett was not available to provide further information on the deal, one commercial broker speculated that Extell sold mainly because it had too many irons in the fire. “It’s probably just too small for them to undertake as they are focused on pursuing new larger developments,” the source said. “They had a good deal with Cambria but it made more sense for them to use their cash for bigger projects.”