The Real Deal
August 22, 2012
SL Green and the Naftali Group have partnered to buy the fee interest in a development site formerly owned by Sam Chang at 33 Beekman Street in the Financial District.
The partnership closed on the deal for the fee interest yesterday, the Naftali Group revealed today, and plans on developing a Gene Kaufman-designed 30-story student housing facility there to cater to Pace University students. Upon completion of the development, the partnership will convey a long-term ground lease condominium interest in the building to Pace University for approximately 29 floors of student housing together with ground-floor school-related space, the company said. Naftali declined to comment on how much the partnership paid for the site. CEO Miki Naftali said in a statement: “Teaming up with SL Green for a large-scale development is truly a unique experience and speaks to the strength of our position in New York City as both a developer and a partner.”
Sources said the deal has been in the works for close to six months and the site in contract for several months. SL Green and Naftali share a 51 percent stake in the development, sources said, while Israeli company Harel Insurance and Finance was brought on as investment partner in the latter stages of the deal and has a 41 percent interest. No brokers were involved in the deal.
For SL Green, the project will not be their first in connection with Pace. The company is currently developing a 24-story building for the university at 180 Broadway with retail investor Jeff Sutton. The facility will be used as a dormitory. “Our recent experience with Pace on the 180 Broadway project has demonstrated that we can work well with the university’s administration to create a superior living experience for its students,” SL Green’s Andrew Mathias said.
As The Real Deal has reported, 33 Beekman Street was previously owned by developer Sam Chang, whose McSam Hotel Group had planned a 36-story hotel for the site. Chang sold off the distressed development site in 2011 for $15.7 million. He had paid $22 million for it in 2007, records show. The buyer, Massachusetts-based Jiten Hotel Management, was the seller in the deal with Naftali and SL Green.
Construction of the tower is slated to begin in the first quarter of 2013 and will be completed in time for the new school year in 2015.
Nayan Patel, CEO of Jiten, was not immediately available for comment.