February 01, 2013 at 13:46 PM EST
Flatotel sold for fat sum of $180M
The Flatotel, a 46-story hotel on West 52nd Street that was recently seized by its lenders, has been sold for $180 million. The property will be converted into high-end residential condominiums. A partnership between investors Joseph Chetrit and David Bistricer has acquired the building from a venture between the Rockpoint Group, Atlas Capital Group and Procaccianti Group, who had foreclosed on the 289-room hotel property just this month. Reached in his office, Mr. Bistricer said that he and Mr. Chetrit would turn the building into condos that would likely be delivered to market in about 18 months. Though Mr. Bistricer declined to say how much the pair would seek for units in the building, the city has seen a surge in the price of luxury apartments as wealthy buyers and foreigners alike have shown a willingness to pay for top end Manhattan real estate. Earlier this month, Messrs. Bistricer and Chetrit won the right to acquire the Sony building at 550 Madison Ave. for a whopping $1.1 billion, beating out a heated field of some the city's top real estate owners. "Of course Sony will be higher end than what we do at Flatotel," Mr. Bistricer said, alluding to the pair's plan to convert the bulk of that 700,000-square-foot tower into ultra luxury apartments that will command $4,000 per square foot and higher. "But Flatotel will be for the luxury market as well." Right now, Messrs. Bistricer and Chetrit are engaged in the task of raising as much as $900 million to finance the Sony purchase, which must close by mid-March. "We're exclusive right now with one lender," Mr. Bistricer said, declining to disclose the identity of the capital source. Among the groups that the two are rumored to be talking to is SL Green Realty Corp., a major property owner in the city that is interested in holding mezzanine debt against the Sony building. Both the Flatotel and the Sony building were sold by brokers Adam Spies and Doug Harmon of Eastdil Secured. The pair have been among the most active investment sales brokers in the city in recent years, arranging several high profile transactions including the sale of 111 Eighth Ave. to Google and the Starrett Lehigh Building to RXR Realty in the past couple of years. The Flatotel, and the 300-room Alex Hotel, at 205 E. 45th St., had been owned by the Alexico Group, a firm controlled by investors Simon Elias and Izak Senbahar. The two defaulted on their debts against the properties, which were held by Anglo Irish Bank. The Irish lender, however, sold the mortgages at a discount to the Rockpoint Group, Atlas Capital Group and Procaccianti Group, who took the properties from Messrs. Elias and Senbahar through a foreclosure proceeding.
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