Sam Chang’s McSam Hotel Group is in contract to sell its newly constructed Garment District Hotel to Magna Hospitality Group.
The price for the 570-room hotel was undisclosed, according to PincusCo. The property at 338 West 36th Street has $185 million in debt.In the unlikely scenario that it would sell for just the debt, it would be on par with the fifth priciest Manhattan hotel sale last year.
338 West 36th Street (Credit: Gene Kaufman Architect)
Last year, Magna also bought a hotel development site at 140 West 24th Street for $113 million from McSam, which is one of the most prolific hotel developers in the city.
The Garment District hotel, which stands at 26 stories, received its initial temporary certificate of occupancy last month. The top half of the building will have a Marriott SpringHill Suites while the lower half will be a Marriott Fairfield Inn & Suites. Chang signed the contract on Aug. 30, 2018 and the deal is expected to close in early March, the report said.
The hotel is designed by frequent Chang collaborator, architect Gene Kaufman, and includes a bar and dining area with both indoor and outdoor seating.
Hotel transactions are poised to rise in areas of Midtown and Brooklyn that are zoned for light manufacturing, where the city has imposed hotel development restrictions. That means existing projects and site could become more valuable.
“There is still an overhang of supply that will cause a little bit of turbulence in the market,” Jay Morrow, a director at brokerage firm Hodges Ward Elliott, said. He was not involved with the 36th Street transaction. “But on the back end, in the long term, Manhattan lodging is strong.” [PincusCo] — Meenal Vamburkar