Han’s Holding Group Offloads Chelsea Hotel for $50M

New York City’s hotel market is showing signs of life following the trade of a Hilton Garden Inn in Chelsea.

Investor Raymond Chau acquired the 169-key property at 121 West 28th Street for $49.9 million, the Commercial Observer reported, using the entity Hammertime W28 Street for the purchase. The deal breaks down to $295,000 per room.

The seller was international real estate developer Han’s Holding Company, which sold the property through the entity Han’s 28 Hospitality. Hand’s Holding purchased the property nine years ago for $53.8 million, so it took a slight loss in the process.

Neither party commented on the deal to the Observer. Han’s Holding refinanced the 71,000-square-foot hotel over the summer with a $24 million loan from Citibank, replacing a $31.7 million loan from the same lender.

New York City’s hotel industry is in the doldrums in terms of development.

Thousands of rooms have been eliminated from the city and Manhattan specifically since the year before the pandemic, according to JLL. There were also 16,000 rooms converted to migrant housing, though the city is beginning to move off of those deals and leave the future of the properties back in the hands of the owners.

But there’s been recent movement on the sales side. Sam Chang sold a 201-key hotel in Queens near the John F. Kennedy International Airport for $42 million, while Manga Hotels purchased a 160-key hotel in Soho for $56 million.

Chelsea has seen recent hotel deals. At the start of the year, Blackstone agreed to purchase the Kimpton Hotel Eventi from DLJ Real Estate Capital Partners, a private equity real estate investment firm, for $175 million. The hotel has 292 rooms, three restaurants, a 450-spot parking garage and 45,000 square feet of meeting space.

In November, meanwhile, Chang’s McSam Hotel Group sold the 15-story, 228-key hotel Holiday Inn Express on West 29th Street for $59.8 million, or $262,000 per key. The buyer in that deal was private equity firm Prospect Ridge.

— Holden Walter-Warner