T&E buys West Chelsea lot from PPHE for $33.5M

PPHE Hotel Group, based in Amsterdam, sold its vacant West Chelsea site at 538-542 West 29th Street to T&E Development of Brooklyn for $33.5 million. The deal closed late Thursday, Commercial Observer reported. It unwinds a 2019 acquisition. PPHE and partner Largo paid about $42 million for the land at the time. Their plan called for a 98-key hotel. It also included 55 condos. The new price is roughly 20 percent below that purchase.

Colliers, which represented the seller, lists 74,063 square feet of development potential. The lot itself is 9,875 square feet. It carries C6-3 zoning in the Special West Chelsea District, with no affordable housing requirement. At the sale price, that potential works out to about $452 a square foot.

PPHE co-CEO Greg Hegarty said in February that “significant changes to the regulatory landscape” for ground-up hotel development in New York contributed to the decision to exit. T&E arrives as a residential builder. The firm recently completed the Florian, a 54-unit condo at 350 East 18th Street in Gramercy Park.

Zach Redding of Colliers, the seller's broker, says the parcel is one of the few remaining unconstrained development sites in West Chelsea. Only one condo building is under construction between West 20th and West 30th streets. Nearby condo sales have averaged about $2,884 a square foot. Chelsea pricing is up 44 percent since 2020, according to Colliers, the largest five-year increase among Manhattan submarkets.

Cost and rate volatility, Redding argues, has pushed most new New York projects toward trophy buyers with sellouts above $3,000 a foot. “The deeper part of the market — buyers looking in the $2,000 to $2,700 range — has been left unserved,” he told Commercial Observer. A condo build here would be one of the few projects delivering into that segment in three to four years.

Crain's New York Business first reported the sale was set to close this summer. T&E did not immediately return a request for comment.