Isaac Chetrit and his partners are planning to shut down the Stewart Hotel across from the Madison Square Garden and convert it into apartments.
Chetrit, along with his brother, Eli, and Ray and Jack Yadidi of Sioni Group are planning to build 625 apartments and 35,000 square feet of amenity space, according to a source familiar with the transaction.
The building can be turned into a hotel as-of-right, meaning without new zoning. The developers expect to close the hotel by the end of this year and finish the conversion in 24 to 36 months.
A WARN notice filed with New York’s Department of Labor said 158 employees would be laid off beginning Oct. 7 because of the conversion.
Highgate, Sioni Group and Isaac Chetrit’s Patriarch Equities acquired the four-star hotel, at 371 Seventh Avenue, for $217.5 million in December 2017. Blackstone provided a $158.8 million loan for the acquisition.
The four-star hotel, at West 31st Street, was built in 1929 as the Governor Clinton.
Hotel-to-residential conversions are becoming more common as hoteliers seek to take advantage of the booming rental market. In Midtown, the 866-key Hudson Hotel, which shut down at the onset of the pandemic, is set to become a 438-unit development with office and commercial space.
The Stewart Hotel conversion also comes as Vornado plans a major redevelopment surrounding Penn Station.
Crain’s first reported the news of the hotel conversion.
Isaac Chetrit, a cousin of the better known Joe Chetrit, has been among the more active New York City dealmakers as of late. He is close to locking in a $350 million loan to construct a 69-story tower in the Garment District. Chetrit is also building a 28-story residential project in Washington Heights.