David Schwartz’s Slate Property Group closed on its acquisition of the Stewart Hotel in Midtown Manhattan, readying a massive hotel-to-residential conversion.
Slate and its nonprofit partner Breaking Ground acquired the property at 371 Seventh Avenue for $255 million, Crain’s reported. Over the summer, The Real Deal reported that the partners were nearing a deal to grab the property from Jack Yadidi’s Sioni Group and Isaac Chetrit’s Patriarch Equities for around $275 million.
Yadidi and Chetrit had envisioned a conversion of the property. Yadidi filed plans with the city last year to convert the property into a 625-unit residential project. It was a 618-key hotel, but it closed in 2022 and was temporarily used as a migrant shelter.
Slate and Breaking Ground are pursuing a similar project, though with a slightly lower unit count.
The incoming ownership group will convert the property into 579 affordable housing units, including apartments for formerly homeless individuals. Monthly rents are expected to start between $1,385 to $1,731.
The redevelopment will also include office space for social services overseen by Breaking Ground. The conversion is expected to take two years, a shorter timeline than comparable projects due to the property’s existing residential-favorable layout.
The all-in cost of the redevelopment, including the building acquisition, will reach roughly $500 million. The state’s Hotel and Commercial Conversions Program is providing $87 million in financing.
“This project combines extraordinary scale, rapid construction and long-term stewardship by a respected non-profit,” Schwartz said.
Patriarch, Sioni and Highgate acquired the then-four-star hotel across from Madison Square Garden in 2016 for $217.5 million, securing a $158.8 million loan from Blackstone. Early last year, Chetrit acquired Highgate’s stake in the hotel, clearing the way for the conversion.
Slate is one of the city’s most prolific affordable housing developers. A few months ago, the city picked Slate, Xenolith Partners and nonprofit Comunilife to build more than 600 affordable housing units in northern Manhattan. The team will develop 4095 Ninth Avenue, a long-vacant, city-owned site along the Harlem River in Inwood.
— Holden Walter-Warner
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