Carlton chairman Howard L. Michaels announced today that he organized an equity partnership between Ian Schrager, Steve Witkoff and Howard Lorber to form a joint venture to buy an equity stake in 156-162 Leroy Street and the adjacent corner parcel 357-363 West Street, owned by Richard Mack’s Area, a real estate investment firm that announced last month it would be acquired by Los Angele-based Ares Management.
Carlton also arranged the senior debt financing from a non-New York balance sheet lender which was a particularly artful financing given that the property is land and still has to receive a residential zoning variance.
Michaels and Carlton, who specialize in putting together equity partnerships and highly leveraged multi-tranched debt solutions, put the trio together last year when the group acquired a major development site (with Ziel Feldman) on Chrystie Street to build a new Schrager branded condominium and hotel.
Michaels said he has also put together one other “huge, confidential Manhattan hospitality transaction” with Schrager, Witkoff and Lorber which will be announced shortly.
On Leroy Street, Michaels put Schrager together again with Witkoff and Lorber who collectively have an equity stake in the Leroy Street West Village parcel where the hotelier plans to build a large residential tower together with Area Property Partners.
The parcel has as-of-right zoning that could accommodate an approximately 89,000-square-foot hotel, but sources said the group plans to seek a variance for a residential tower of 100,000 square feet or more.
The new group recapitalized the Leroy Street property, which one source said now has a value of about $50 million or approximately $600 per square foot. Michaels also arranged 90% financing for the 215 Chrystie Street land and to-be-built condo and hotel transaction back in December when he initially put together the investment partnership of Schrager, Witkoff and Lorber.