T&E Development Buys West Chelsea Site for $34M From PPHE Hotel Group

A development site in Manhattan’s West Chelsea area previously conceived for hotel and luxury residences in 2019 by an international hospitality firm is now poised for a new residential journey.

Amsterdam-based PPHE Hotel Group sold the property at 538-542 West 29th Street to Brooklyn-based T&E Development for $33.5 million in a deal that closed late Thursday afternoon, Commercial Observer has learned. 

Colliers represented the seller with a team led by Zach Redding, Dylan Kane and Jared King.  Sporn Group’s Lenny Sporn arranged the sale on behalf of the buyer.

Crain’s New York Business first reported that the deal was set to close this summer. 

PPHE Hotel Group announced in March 2019 it had formed a joint venture with developer Largo to acquire the vacant lot for around $42 million, with plans to build a 98-key hotel and 55 condos. An entity connected to PPHE field demolition permits for the project in late 2023, Crain’s reported at the time. 

Greg Hegarty, co-CEO of PPHE, said in a February statement on the pending sale that “significant changes to the regulatory landscape” for ground-up development of hotel projects in New York following its 2019 acquisition contributed to the decision to part ways with the property.

The 9,875-square-foot vacant lot between 10th and 11th avenues has 74,063 square feet of development potential under New York City’s C6-3 zoning within the Special West Chelsea District and will not require an affordable housing component, according to Colliers. T&E recently completed a 54-unit condo development called the Florian at 350 East 18th Street in Manhattan’s Gramercy Park. 

Redding said the property is one of the few remaining unconstrained development sites in West Chelsea and would be well positioned as a residential project given there is only one condo building currently under construction between West 20th and West 30th streets. He noted that nearby condo developments have netted average sales of roughly $2,884 per square foot and that Chelsea pricing is up 44 percent since 2020, the largest five-year increase of all Manhattan submarkets.

“Cost and rate volatility has pushed nearly every new New York City project toward the trophy buyer because sellouts north of $3,000 per foot can absorb unforeseen costs,” Redding told CO. “The deeper part of the market — buyers looking in the $2,000 to $2,700 range — has been left unserved. If it’s built as condos, this will be one of the few projects delivering into that segment in three to four years.” 

T&E Development did not immediately return a request for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.