Sam Chang of McSam Hotel Group in contract to sell 974-key hotel development

The anonymous entity Ny 48 LLC signed a contract to pay an undisclosed amount to Sam Chang’s McSam Hotel Group through the entity Tmhcr 48th Street LLC for the under-construction, midblock hotel building at 150 West 48th Street in Times Square, Manhattan.
The memorandum of contract was dated February 28, 2022 and was recorded on March 23, 2022. The property has 300,941 square feet of built space according to PincusCo analysis of city data.
The seller bought the property on December 18, 2019, for $138.8 million. The signatory for McSam Hotel Group was Sam Chang. The signatory for Ny 48 LLC was Gregory Weingart. The scheduled closing date, according to the memorandum, is the earlier of a) the date which is 30 days after the hotel has been “substantially completed” per the contract or b) the first anniversary of the “Outside Completion Date.”
The signatory for the buyer is an attorney from Pittsburgh, Gregory Weingart, who has represented Magna Hospitality Group in the past, but it could not be determined who the contract vendee was. There have been four anonymous acquisitions that follow this same pattern, with the LLC care of address at the law firm Arnold & Porter, while the signatory is Gregory Weingart.

Prior sales and revenue

The seller McSam Hotel Group purchased nine properties in two transactions for a total of $9 million and sold nine properties in eight transactions for a total of $492.1 million over the past 24 months.

The property

The 150 West 48th Street parcel has frontage of 155 feet and is 100 feet deep with a total lot size of 15,565 square feet. The zoning is C6-5.5 which allows for up to 12 times floor area ratio (FAR) for commercial The city-designated market value for the property in 2022 is $17.2 million.The most recent loan totaled $210 million and was provided by Spruce Capital on December 18, 2019.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received $24,900 in ECB penalties and $32,500 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 974-unit, 260,360-square-foot R-1 building. The project was developed by Sam Chang with plans filed December 23, 2019 and permitted September 3, 2020.

The neighborhood

In Times Square, the majority, or 58 percent of the 10.1 million square feet of commercial built space are office buildings, with hotel buildings next occupying 30 percent of the space. In sales, Times Square has had very little sales volume relative to other neighborhoods with $53.7 million in sales volume in the last two years. For development, Times Square has 1.5 times the average amount of major developments relative to other neighborhoods and is the 14th highest in Manhattan. It had 1.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of six of the nine commercial properties representing 2,750,940 square feet of the 3,154,582 square feet. The largest owner is Beacon Capital Partners, followed by Tribeach Holdings and then SL Green Realty. There are four active new building construction projects totaling 650,261 square feet. The largest is a 974-unit, 260,360-square-foot R-1 building developed by Sam Chang with plans filed December 23, 2019 and permitted September 3, 2020. The second largest is a 650-unit, 248,520-square-foot R-1 building developed by David Wrobel with plans filed April 5, 2017 and permitted February 11, 2019.

The majority, or 63 percent of the 3.2 million square feet of built space are office buildings, with hotel buildings next occupying 35 percent of the space.

The seller

The PincusCo database currently indicates that McSam Hotel Group owned at least 21 commercial properties with 967,098 square feet and a city-determined market value of $259.7 million. (Market value is typically about 50% of actual value.) The portfolio has $1.2 billion in debt, with top three lenders as Oak Hill Advisors, UBS Bank, and Spruce Capital respectively. Within the portfolio, the bulk, or 98 percent of the 967,098 square feet of built space are hotel properties, with mixed-use properties next occupying 2 percent of the space. The bulk, or 54 percent of the built space, is in Manhattan, with Queens next at 46 percent of the space.

Surrounding

Within a 400-foot radius of 150 West 48th Street, Pincusco identified 12 commercial real estate items of interests occurred over the past 24 months.
Of those 12 items, one was in new building development. It was a new building permit application filed on April 28, 2021 for a 112,862-square-foot R-1 building with 401 residential units at 711 7th Avenue.
Of those 12 items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on December 1, 2021 for the $656,085 renovation of 5,272,364-square-foot E building with zero residential units at 1221 Avenue Of Americas.
One of those 12 items was a sale which McSam Hotel Group bought the 60,619-square-foot, two-unit hotel (HB) on 157 West 47th Street for $34.6 million from Rockefeller Group on November 7, 2019.
Of those 12 items, nine were loans above $5 million totaling $759.3 million. The most recent of the nine was Extell Development which borrowed $325 million from Guggenheim Partners secured by the 277,509-square-foot, two-unit hotel (H1) on 153 West 48th Street on March 8, 2022.

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