New York’s Chelsea finally sells

The Real Deal Online in New York City reported on Tuesday that real estate investor Joseph Chetrit has, indeed, closed on the reported US$80 million sale of the legendary Hotel Chelsea in New York City, which in its heyday was an artists’ haunt hosting the likes of Bob Dylan, Janis Joplin, Dylan Thomas and Charles Bukowski.

For months the subject of speculation as to whether the deal would close and if it would remain as a hotel with condo units, the hotel portion of the building checked-out its last guest on Tuesday (condo owners in the building remain), fittingly after security had to convince one final reluctant hotel guest to vacate his room.

The press shy Chetrit, whose portfolio includes the Willis Tower in Chicago and nearly 4.9 million sq ft (0.4 million sq m) of commercial space in New York City, reportedly plans to renovate and reopen the hotel and has brought on well-known hotel architect Gene Kaufman to work on the project.

“It is a very interesting building with tons of potential and clearly some challenges,” said Stephen Brandman of Thompson Hotels, New York City. “Joe Chetrit is a great real estate developer that has dealt with complicated projects before. If Joe partners up with the right hotel management company and is patient with the current tenants and involves them in the long-term vision the hotel could be very successful. I live a block away so would love to see the property evolve.”

Echoing Brandman’s comments was Daniel Lesser, president and CEO, LW Hospitality Advisors, New York City. “The current state of the asset represents a tremendous upside opportunity as evidenced by the recent bid process that attracted numerous sophisticated hotel investors who fiercely competed to obtain control of the property,” he said. “Renovation/repositioning investment opportunities of iconic hotel assets situated in 24/7 urban high barrier to entry markets are rare. Today, the Hotel Chelsea represents such a unique prospect.”

New York City's famed red-brick Hotel Chelsea. Photo by George Rypysc III/CC
New York City’s famed red-brick Hotel Chelsea. Photo by George Rypysc III/CC