New York City's hotel real estate landscape is witnessing a significant turnover as hotelier Sam Chang accelerates his exit from the business. Records note the recent sale of a Holiday Inn Express located at 232 W. 29th St., which fetched almost $60 million. The 228-key inn, sandwiched between Seventh and Eighth avenues, has been acquired by the private equity firm Prospect Ridge through its entity Cactus Street PropCo, as reported by Crain's New York Business. The deal arrives on the heels of a series of sales by Chang, signaling a move toward retirement for the long-time hotelier.
The Holiday Inn Express at West 29th Street, which Chang has opted to hastily offload, was part of his expansive portfolio built over years. According to Crain's New York Business, neither Prospect Ridge nor Chang were reachable for comment by press time. The hotel's operational dynamics remain somewhat uncertain, as Hersha Hotels and Resorts, with headquarters in Philadelphia, appears to have been managing it, despite attempts to reach them proving to be unsuccessful.
Chang’s latest transactions extend beyond Manhattan, reaching boroughs such as Queens. The Business Journals cites the sale of a Long Island City property slated for a DoubleTree by Hilton hotel development at 38-21 9th St. The sale price recorded was $55.6 million, with the buyer securing a $36.1 million loan from the State Bank of Texas for the Queens property. Chang had initially acquired the location back in 2018 for a significantly lower price of $6.5 million.
These sales mark the continuation of a divestiture spree vividly reflected in the flurry of hotel sales in New York over recent years, including the disposals of locations such as the Long Island City Holiday Inn, a Times Square hotel complex, and a Chelsea Marriott project. Despite attempts made to precisely calculate how much of Chang's portfolio remains, this information stays under wraps for now. Both Crain's New York Business and The Business Journals highlight the substantial sum garnered through these transactions, with the latest Long Island City deal alone surpassing the $50 million mark.
Such shifts come during a period where New York City's hotel occupancy rates have seen an upturn. Climbing from a pandemic low of 47% in 2020 to 87.4% as of August, the industry's revival is evidently attracting investor interest amidst a changing city landscape boosted in part by an unexpected influx of migrants seeking shelter, says Crain's New York Business. However, the nature of occupancy is set possibly to shift again as the city looks to phase out existing contracts with hotels housing migrants.
