NEW YORK CITY — Eastern Consolidated has secured a $210 million debt and equity package to finance the construction of a new, 180,000-square-foot Hyatt Place Hotel in Manhattan’s Garment District.
The financing consists of a $95 million first-mortgage loan from Bank of the Ozarks and a $25 million preferred equity investment by Square Mile Capital Management. Adam Hakim and James Murad of Eastern Consolidated arranged the financing on behalf of the McSam Hotel Group, a New York-based hotel development firm.
“With a revitalized theater district, thriving hospitality industry and constantly improving retail, the Times Square area is a magnet for tourists,” Hakim said. “New York City hosted a record 60.3 million visitors last year, which boosted the city’s hotel occupancy rate to an average of 90.1 percent, and more visitors are expected this year.”
The 25-story, 520-key hotel will be located at 350 W. 39th St., in between Eighth and Ninth avenues in the Hudson Yards submarket. The chairman of McSam Hotel Group, Sam Chang, purchased the site in 2015 for $112 million; terms of sale allow him to develop up to 300,000 square feet of the property, according to The Real Deal.
Consequently, plans for a 123,000-square-foot, 21-story, 380-room hotel next to the Hyatt Place are underway. Chang’s firm also filed plans to build a 60,000-square-foot, 25-story, 175-key hotel on the adjacent property, 338 W. 39th St, according to The Real Deal.
With 125 feet of frontage along 39th Street, the property will be the only Hyatt-branded hotel in the Times Square area. Amenities will include a restaurant with outdoor dining, ballroom, bike and luggage storage, guest laundry services and an exercise room.
Since its inception, the McSam Hotel Group has completed more than 70 ground-up hotel developments, including 25 throughout New York City’s five boroughs.
Hudson Yards was rezoned in 2005 to promote the development of 24 million square feet of Class A office space, as well as 1 million square feet of retail space and 2 million square feet of hotel space. Since the rezoning went into effect, more than 5,600 apartment units and 3,900 hotel rooms have been built in Hudson Yards.
Delivery of the Hyatt Place Hotel is slated for the fourth quarter of 2018.
— Taylor Williams