Sam Chang Sells Chelsea Holiday Inn Express

Sam Chang’s steady selloff marches on, this time in Chelsea.

The McSam Hotel Group sold the 15-story Holiday Inn Express at 232 West 29th Street for $59.8 million, Crain’s reported. The buyer is private equity firm Prospect Ridge, which is paying more than $262,000 per key for the 228-room hotel.

Prospect Ridge simultaneously obtained a $51 million mortgage on the property from First Citizens Bank and Trust. The loan amounts to 85 percent of the purchase price, a high loan-to-value ratio for a commercial real estate acquisition.

While the seller appears to be linked to Chang, the ownership is opaque. Property records note the seller as Brisam Group, which is tied to both Chang and the Malaysia-based KSL Group. Brisam purchased the hotel as part of a six-property, $317.8 million acquisition last November, according to PincusCo.

The person who signed off on the Holiday Inn Express deal for the seller was an executive of Hersha Hospitality, an entity that KSL purchased in November 2023. The Chelsea hotel was reportedly one of the properties included in that 2023 deal. It’s not clear if Hersha, which could not be reached for comment, will continue operating the property.

KSL declined a request for comment from The Real Deal. Steve Iorio of Prospect Ridge did not respond to an email from TRD, and Chang did not respond to a request for comment from Crain’s.

Prospect Ridge’s portfolio includes assets in the multifamily, industrial, hospitality, office and student housing sectors, according to its website. Its recent investments in the hospitality sector include the NYC Select Service Hotel on West 24th Street as well as properties in Austin and Baltimore.

Chang built a reputation as one the most prolific hotel developers in New York, but is steadily dismantling his empire, piece by piece, after vowing to get out of the industry in response to tightening development rules. This sale is at least his eighth since 2021. Earlier this year, he sold a 142-key property in Long Island City for $40 million.

Late last year, Chang sold three hotels along Fifth Avenue in Midtown Manhattan for more than $200 million combined. Earlier, he sold a trio of Hilton-branded hotels to Magna Hospitality Group for $160 million. Other sales in recent years include the $76.5 million sale of a Long Island City hotel to Bayrock Capital and the $147 million sale of a 531-key property in West Chelsea to Phoenix Hospitality in 2020.

— Holden Walter-Warner