LeFrak to buy Dumont hotel for $120M, eyeing resi conversion
Pebblebrook selling second of two properties after split from Denihan
The LeFrak Organization is in contract to acquire the Dumont NYC hotel for nearly $120 million – and is likely to convert the property to residential, The Real Deal has learned.
The 37-story, 252-key, 176,600-square-foot Affinia-branded property at 150 East 34th Street in Kips Bay is one of two assets – the other being the 618-key Affinia Manhattan NYC – that Pebblebrook Hotel Trust took after ending its partnership last year with Denihan Hospitality Group. Pebblebrook, a Maryland-based real estate investment trust, promptly placed them on the market.
Sources familiar with the deal said the LeFrak Organization, led by Richard LeFrak, will likely convert the property into rental apartments.
Highgate, Isaac Chetrit’s AB & Sons and Ray Yadidi’s Sioni Group closed on the $217.5 million purchase of the Affinia Manhattan NYC hotel, at 371 Seventh Avenue, in December. They renamed it the Stewart Hotel and are planning a repositioning.
The Dumont deal took a bit longer to go under hard contract and is expected to close in the next two to three months, sources said. The price comes out to about $475,000 per key and $680 per square foot.
The Denihan family developed the four-star hotel, located between Lexington and Third avenues, in 1986. Pebblebrook bought a 49 percent stake in the Dumont and the five other Manhattan hotels for $152 million in 2011. At the time of the October split, the joint Pebblebrook-Denihan portfolio was valued at $820 million.
The LeFrak Organization [TRDataCustom] controls more than 40 million square feet in New York, Los Angeles, London and Miami, according to the firm. LeFrak is the second largest landlord in New York City, with 12,532 units, trailing only the Related Companies, according to TRD’s 2016 ranking of residential landlords, The firm has been focused on its Newport megaproject in Jersey City in recent years, but still occasionally makes acquisitions in New York City. In 2014, it paid $222.5 million for a 24-story Pace University dormitory building at 180 Broadway. Richard LeFrak is also the co-chair of a President Trump’s infrastructure council with Vornado Realty Trust’s Steven Roth.
The purchase is said to be a part of a 1031 tax exchange. Sources said LeFrak has also been in talks to sell the LeFrak Center office building at 97-77 Queens Boulevard in Rego Park for a price in the range of $120 million.
Representatives for LeFrak, Pebblebrook and the brokers declined to comment.
Some of New York’s most iconic hotels are going at least partially residential. Anbang Insurance Group, for example, closed the Waldorf Astoria earlier this month for a three-year renovation that will add 321 residential condo units to the property. Meanwhile, BD Hotels and Sean MacPherson purchased Hotel Chelsea for $250 million last year and are planning to add condos.
(To see a selection of properties owned by the LeFrak Organization, click here)