Main Photo: West Chelsea, New York
Date: March 2019
Location: West 29th St., West Chelsea, New York, USA
Name: art’otel New York – opening …TBA
No. of Keys: 98 and 55 apartments
Buyer: JV Local developer Largo, with Park Plaza Hotel Europe – PPHE, who will manage the hotel.
The art’otel brand is open in Amsterdam, Berlin, Cologne and Budapest, with two London sites in development.
Largo is a private real estate development company specialising in the acquisition, development and construction of luxury multifamily, commercial and mixed-use projects in New York City.
Since its founding in 2009, Largo has successfully developed over 1.5 million square feet of luxury rental apartments, condominiums, office buildings and retail in prime locations in Manhattan and Brooklyn.
PPHE, an international hospitality real estate group, is pleased to announce they have entered into a joint venture agreement with Largo 542 West 29th Street Partners LLC, to acquire properties located at 538, 540 and 542 West 29th Street, New York.
The joint venture intends to develop a mixed-use scheme consisting of a 98-room art’otel® branded hotel with extensive public areas and 55 residential condominium units.
PPHE and Largo each hold a 50% interest in the joint venture and, once the hotel is operational, PPHE will manage it under a management contract.
The Property is located in West Chelsea by the popular and regenerated High Line on the West Side of Midtown Manhattan, a short walk from the Meatpacking District, Penn Station, Madison Square Garden and immediately adjacent to Hudson Yards, the largest private development in the US.
This area has undergone large-scale redevelopment in recent years, creating a buzzing new neighbourhood known as the preeminent art gallery district in New York City, renowned for restaurants and bars and is an ideal location for the Group’s art-inspired lifestyle art’otel® brand.
The interior design of the art’otel will be inspired by a signature artist, whose original works will be displayed, and the hotel will offer a destination restaurant and bar.
This Project is in line with PPHE’s development strategy to target real estate in prime locations and attractive geographies where it believes there is significant upside potential to drive growth and long-term value through both its property portfolio and operations. PPHE is headed up by Boris Ivesha.
This Project is also part of the Group’s plan to bring art’otel® to major cities, building on the success of the brand in Amsterdam, Berlin, Cologne and Budapest, and the development of art’otel london hoxton and art’otel london battersea power station.
The Property Acquisition was partly funded with a US$22.15 million loan from Bank Hapoalim B.M.
The Loan is secured by a first priority mortgage encumbering the Property and each of certain Largo guarantors and PPHE have delivered certain customary guarantees in favour of the Lender.
The balance of the purchase price for the Property Acquisition and associated costs is funded by Largo and PPHE. The total capital committed by PPHE to the joint venture in respect of the pre-construction phase, including the property acquisition and certain pre-construction costs, is US$ 17.6 million, to be funded from the Company’s existing cash resources.
The joint venture arrangements also contain customary exit provisions which will apply following satisfaction of the Construction Conditions, and pursuant to which the parties may require, or be required, to acquire each other’s interest in the joint venture in certain limited circumstances.
Boris Ivesha, President & Chief Executive Officer of PPHE Hotel Group said:
“We are delighted to have acquired an interest in this property which is at the centre of the new Hudson Yards, West Chelsea, Manhattan. We have a proven track record of successful property development and creating value throughout the hospitality real estate supply chain. We relish the opportunity to enter this new market and expand our footprint into the United States.
Price: Acquisition only U$42m
THPT Comment: UK money buying US property – Brexit…What Brexit?
First Seen: PPHE website
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