Soho Properties, MHP Join Hampshire Hotels to Create New Dream Hotel at Times Square
- Apr 09, 2014
A development team comprising Soho Properties, MHP Real Estate Services and Hampshire Hotels Management L.L.C. has acquired 560 Seventh Ave. in Manhattan’s Times Square, which they will replace in a $300 million project with a new Dream Hotel and 20,000 square feet of luxury retail.
The developers paid $61 million for the property, Bloomberg reported. The site on the northwest corner of 40th Street is the former home of Parsons The New School for Design, which moved to a new building at 65 Fifth Ave. in Greenwich Village in December. The developers have an agreement with long-term tenant Garment Center Congregation to provide a temporary location while the project is being built. In addition to 20,000 square feet of retail, the developers will include space for a sanctuary for the Congregation.
“We are thrilled to complete this acquisition with the addition of our partner Hampshire Hotels, and begin the process of creating a brilliant, cutting-edge hotel that will bring a new level of excitement and luxury to the southern edge of the Times Square neighborhood,” Sharif El-Gamal, chairman & CEO of Soho Properties, said in a news release. “We are especially pleased to accomplish our business goals while preserving an important historic religious institution.”
The size of the hotel and details on the construction timetable were not released. Further information on the retail portion of the development was not available.
David Sturner, principal and COO of MHP, said in the release the property “will be reimagined and will be a terrific addition to perhaps the most visited area in New York.”
“The southern end of the Times Square District has clearly transformed into a formidable business corridor and we see this important address as a strategic addition to the Dream portfolio,” added Eric Danziger, president & CEO of Hampshire Hotels Management.
The New York City-based owner and manager of hotels in the United States, Europe and Asia, Hampshire owns two other Dream hotels in Manhattan – the Dream New York at 210 W. 55th St. in Midtown and Dream Downtown at 355 W. 16th Street in Chelsea. The firm also operates Dream hotels in Thailand, India, South Beach in Miami and recently announced plans for Dream Dallas.
Eran Nornberg, president of Atum Equity, will be managing the hotel’s development with Hampshire Hotels.
MVP, formerly known as Murray Hill Properties, brokered the transaction for the buyers while Bob Knakal, chairman of Massey Knakal Realty Services, represented the sellers.
“This transaction is indicative of the growing allure of a rapidly expanding Times Square District,” Knakal said in the release. “It was also one of those unusual transactions that was a great deal for both the seller and the buyer.”
The development comes at a time when the economy is on the upswing in New York City and tourism is booming with about 55 million visitors expected this year. Developers and hotel companies are building new properties and upgrading assets. Last week, Constellation Barclay Holding US, L.L.C. acquired an 80 percent stake in the historic 685-room InterContinental New York Barclay from InterContinental Hotels Group for $240 million and the joint venture is planning a $175 million refurbishing and repositioning of the hotel at 111 E. 48th St. NewYork & Co. said more than 100 properties, most of them in Manhattan, have opened or are planned through 2016. PKF Hospitality Research L.L.C. noted in its December edition of its Hotel Horizons report that luxury, upper-upscale and upscale hotels in the major U.S. markets like New York City are seeing the most investor interest. The March issue of Hotel Horizons said that the New York City’s hotel room inventory will increase by more than 4 percent over the next two years to meet demand expected to continue at least through 2018.
Retail is also recovering in New York City with asking rents in six of 10 Manhattan retail submarkets increasing in 2013, according to Cushman & Wakefield’s Q4 2013 MarketBeat Retail Snapshot for Manhattan. Marcus & Millichap said in its 2014 Real Estate Investment Research National Retail Report that demand for retail space has strengthened and is expected to push construction in New York City to a six-year high.