Another hotelier in SoHo

Real Estate Weekly,  Sept 5, 2007  

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CitySites Commercial Groups' sale of 179 Varick Street, home to the popular 80's-themed nightclub Culture Club, to a hotel group has set a new benchmark price for air rights in West Soho.

The sale also solidifies Varick Street's new status as downtown's hotel row, making this the third new hotel to go into construction along Varick Street, joining Trump's Soho Hotel on Spring Street and the Four Points Sheraton on Charlton Street.

The two-story building at 179 Varick Street came with close to 50,000 s/f of air rights allowing for the possible future development of up to 20 or more stories on the site. CitySites Commercial Group brokered a deal between the building's owners and Asian hotel operator, Wingate Group, for a sale price of $14.2 million.

According to Gregg Roberts, president of CitySites, the deal sets a new price benchmark for this neighborhood. "This is one of the higher prices we've seen for the sale of air rights," he claims. At $330 a square foot, the sale is almost $100 per square foot more than the amount paid by Trump's consortium for the former parking lot three blocks further south.

The sale also solidifies the gentrification of once maligned Varick Street says Roberts. "Many people considered Varick Street a downtrodden neighborhood that was too close to the Holland Tunnel," explains Roberts. "That's turned around and now the area is starting to appeal to hotels and restaurants," he said.

After 10 years of celebrating 1980's dance music, Culture Club will be closing its doors for good on Saturday, September 8. The building has been home to various nightclubs since the mid 1970s, including Tilt and Heartbreak.

Now, the new owners, Wingate Group, are planning to tear down the building and replace it with a high-rise, mid-priced hotel with up to 100 rooms. The new hotel will be Wingate's second foray in the New York market, the first being the eponymous Wingate hotel in Midtown.

COPYRIGHT 2007 Hagedorn Publication
COPYRIGHT 2008 Gale, Cengage Learning