Owners of Hotel-Turned-Migrant Shelter Sell at Huge Loss

Reza Merchant’s The Collective unloaded a hotel in Long Island City for $35.7 million. The London-based co-living developer bought the property in 2019 for $58 million; the sale price represents a 38 percent drop.

One potential reason it sold at a huge discount is that the hotel is being converted into a migrant shelter. The LIC Post first reported the news.

New York City is grappling with an unprecedented influx of migrants from the southern border, exacerbated by Florida and Texas’ busing them to the state without funding or coordination.

A number of hotels have been converted into migrant shelters as a result. Located at 32-02 37th Avenue, the Collective Paper Factory hotel has 123 units, five floors and 80,000 square feet. It was built in 1915.

The buyer is an entity called 37-06 36th Street Holdings. Law firm Jeffrey Zwick & Associates signed for the purchase.

The sale was the highlight of last week’s deals in the middle market, defined as those between $10 million and $40 million. The rest are listed below.

The Reuben brothers coughed up $124 million for Soho retail properties from Vornado Realty Trust, and three of the sales were in the middle market. The Reubens have been aggressively buying properties whose values have fallen while Vornado has been selling buildings to shore up its balance sheet.

Vornado sold 148 and 150 Spring Street to the British billionaires for $15 million. Vornado had bought them in 2008 for $11.5 million. The building at 148 Spring Street has three units, four floors and 6,000 square feet, while 150 Spring Street has five units — one residential — across four floors and 6,400 square feet.

Reuben Brothers also purchased six commercial condos from Vornado, with five at 692 Broadway selling for a total of $15 million, and one at 443 Broadway for $20 million. The unit at 692 is in a 12-floor, 90-unit, mixed-use building that boasts Blink and Soul Cycle as tenants; 56 of the units are residential. (The fourth Vornado property, 510 Fifth Avenue, was sold for $50 million. The deed lists the buyer as Motcomb Estates in London, a subsidiary of Reuben Brothers.)
Terry Considine’s AIR Communities sold an apartment building on the Upper West Side for $21 million. Dubbed The Tempo, it was built in 1928 and has 200 units — 83 of which are residential — over 15 floors and 110,000 square feet.

AIR is an apartment income REIT that spun off from AIMCO. The REIT has been listing properties and sold two buildings for $33.2 million earlier this month. The buyer was an entity called Tempo W 73 LLC, which took out a $19.8 million mortgage from Dime Community Bank to fund the purchase.