Jeff Sutton’s Planned 340-Key Midtown Hotel Enters the Demolition Phase

A Herald Square commercial site owned by Jeff Sutton’s Wharton Properties is headed for the wrecking ball. 

Florida-based hospitality developer Keyah Real Estate Group filed plans with the city’s Department of Buildings last week to demolish the two retail buildings at 27–29 West 34th Street and 21-25 West 34th Street in Midtown Manhattan. The application, first reported by the New York Business Journal, paves the way for Wharton’s longtime plans to replace the low-lying buildings with a 26-story hotel.

The demolition filing follows the closure of British clothing retailer Superdry’s two-story store at 25 West 34th Street. Next door sits 29 West 34th Street, a three-story retail building most recently home to a closed souvenir shop. The latter building was under threat of foreclosure by German bank Helaba a little more than a year ago, The Real Deal reported. Wharton regained control of the property after the lawsuit was settled last month.

Site plans filed by Wharton in August describe a 205,000-square-foot hotel to be constructed on the retail buildings’ 15,000-square-foot lot. The development designed by Manhattan-based firm SRA Architecture + Engineering would include 340 rooms and a rooftop terrace. 

Wharton acquired the properties and a third adjacent building in 2006 alongside SL Green Realty, and later bought out the partner’s stake, according to TRD.

The developer’s repositioning plans at the site date back to 2021, when the scheme consisted of a 176,375-square-foot hotel and retail building at 25 West 34th Street. Hotel and short-term rental provider Sonder was the development’s key tenant, Commercial Observer reported, but that company collapsed under bankruptcy in late 2025. It is unclear whether a new operator has been tapped for Wharton’s expanded hotel plans.

The planned demotion of the 38,000 square feet of commercial space at Nos. 25 and 29 follows a difficult few years for Herald Square’s retail scene. The 34th Street corridor between Fifth and Seventh avenues tracked a 30.5 percent availability rate in the second quarter of this year, according to Cushman & Wakefield data. That figure, although an improvement from 2025, towered above the citywide average of 11.6 percent. 

Spokespeople for Wharton and Keyah did not respond to requests for comment. 

Emily Davis can be reached at edavis@commercialobserver.com.