Slate, Breaking Ground Acquire Midtown’s Stewart Hotel for $255M

A shuttered 611-key hotel in the heart of Midtown is set to be converted into 579 apartments, according to its new owners.

Slate Property Group, a New York City-based multifamily developer-operator, and Breaking Ground, a nonprofit supportive housing developer, have acquired the former Stewart Hotel at 371 Seventh Avenue from Sioni Group and Patriarch Equities for $255 million, the buyers announced Monday.

Slate and Breaking Ground plan to convert the 1929-built hotel across the street from Penn Station into 579 permanently affordable apartments for low-income households and formerly homeless individuals, the announcement said.

The project will be developed and built by Slate, while Breaking Ground will own and operate the site upon completion. Construction is set to begin late next year, but interior work will “begin immediately” because the hotel’s floor layouts are “highly compatible with residential living,” according to the announcement.

“Permanently affordable housing on this scale just doesn’t happen in Midtown,” David Schwartz, co-founder and principal of Slate, said in a statement. “This project combines extraordinary scale, rapid construction and long-term stewardship by a respected nonprofit.

“It is the model for how New York City can break through and make a real dent in this affordability crisis,” Schwartz added. “Thanks to our partnership with Breaking Ground and the support of the city and state, we’re bringing out-of-the-box thinking to New York’s housing landscape to deliver the affordable homes New Yorkers deserve.”

Meridian Capital Group’s David Hayum and Rael Gervis brokered the deal for the sellers, while no one represented the buyers. Spokespeople for Sioni Group and Patriarch Equities did not immediately respond to requests for comment.

The 31-story Stewart Hotel — on the corner of Seventh Avenue and West 31st Street — closed in 2022 and was temporarily used as a migrant shelter.

Sioni Group — which bought the hotel with Patriarch Equities and Highgate for $212.5 million in 2016 — originally filed plans in December 2024 to convert the hotel into 625 residential units. Those plans seemed to have fallen through, as Slate and Breaking Ground were reported to be in talks to acquire the hotel for as much as $275 million back in July, as Commercial Observer previously reported.

The new buyers’ project represents Breaking Ground’s sixth residential conversion project in New York City, following its conversions of the Times Square Hotel at 255 West 43rd Street into 652 units, the Prince George Hotel at 14 East 28th Street into 416 units, the Schermerhorn at 160 Schermerhorn Street into 217 Units, and the 90 Sands at 90 Sands Street into 491 units.

“The Stewart Hotel presents an unparalleled opportunity to generate affordable and supportive housing in the heart of Midtown Manhattan,” Breaking Ground CEO Brenda Rosen said in a statement.

“With so many New Yorkers facing homelessness, mental health challenges, and a shortage of stable housing, this conversion will have a great impact for the city,” Rosen added. “For the individuals and families who will soon call this building home, it represents stability, and the chance to build a better future.”

As part of the Stewart Hotel conversion, Slate will replace all building and mechanical systems, upgrade lighting, and merge adjacent hotel rooms as needed. Rents for low-income apartments in the building will range from $1,385 to $1,731 per month, according to the announcement.

Meanwhile, new office space will be built for on-site social services for both formerly homeless tenants and older adults in the building, the announcement said.

Total development costs for the project — including the hotel acquisition — are projected to be around $500 million. Wells Fargo and J.P. Morgan Chase provided financing for the $255 million acquisition, according to the announcement.

Isabelle Durso can be reached at idurso@commercialobserver.com.