As hotelier Sam Chang accelerates his departure from the industry, New York City’s hotel real estate market is undergoing a dramatic upheaval. According to records, a Holiday Inn Express at 232 W. 29th St. was sold for about $60 million. According to Crain’s New York Business, Prospect Ridge, a private equity firm, has purchased the 228-key hotel located between Seventh and Eighth Avenues through its company Cactus Street PropCo. The transaction follows a string of sales for Chang, indicating the longtime hotelier’s transition to retirement.
Chang’s extensive portfolio, which he chose to quickly sell, included the Holiday Inn Express on West 29th Street. Chang and Prospect Ridge were not available for comment at the time of publication, according to Crain’s New York Business. The operating dynamics of the hotel are still a little unclear because Hersha Hotels & Resorts, which has its headquarters in Philadelphia, seems to have been running it, even if attempts to contact them have not been effective.
Chang’s most recent deals span cities like Queens in addition to Manhattan.The sale of a Long Island City property planned for a DoubleTree by Hilton hotel development at 38-21 9th St. is reported by the Business Journals. The buyer obtained a $36.1 million loan from the State Bank of Texas for the Queens property, and the sale price was $55.6 million. The property was first purchased by Chang in 2018 for a much smaller sum of $6.5 million.
The spate of hotel transactions in New York over the past few years, including the disposal of properties like the Long Island City Holiday Inn, a Times Square hotel complex, and a Chelsea Marriott project, starkly reflects the ongoing divestiture frenzy. Although efforts have been made to determine the exact amount of Chang’s remaining portfolio, this information is currently confidential. The last Long Island City deal alone surpassed the $50 million threshold, and both Crain’s New York Business and The Business Journals emphasize the large amount made from these transactions.
These changes coincide with an increase in hotel occupancy rates in New York City. According to Crain’s New York Business, the industry’s recovery is clearly drawing investor attention amidst a shifting urban landscape, helped in part by an unanticipated surge of migrants needing refuge. It has risen from a pandemic low of 47% in 2020 to 87.4% as of August. However, as the city moves to phase out current contracts with hotels hosting migrants, the nature of occupancy may change once more.
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