To become more inclusive, The Out Hotel is being sold to Merchants Hospitality and will likely change its name.
Sources said as more gays feel welcome at other hotels, the hotel has experienced declining occupancy and revenues — despite special events that have included recent concerts by Barbra Streisand and Cyndi Lauper. Instead of more “kinky boots,” the hotel will get a reboot to keep it going.
Merchants signed an approximately $40 million contract earlier this month to take over the long-term lease for The Out, which sits on land owned by Richard Born on the far western end of The Deuce at 510 W. 42nd St. between Times Square and Hudson Yards.
The Out Hotel was designed and created in 2009 as the city’s first gay-themed hotel by Ian Reisner’s Parkview Developers. The 105-room facility includes 7,500 square feet of restaurant and lounge space, some of the city’s newest conference and meeting spaces and a 14,000-square-foot night club that currently houses XL Nightclub, the largest such venue in the Hudson Yards and Times Square areas.
There is also another 50,000 square feet of as-of-right development rights with preliminary plans.
Leased by Chief Executive Abraham Merchant, Merchants Hospitality now intends to raise another boutique flag, bring in one of the city’s premier night club groups and reposition all the restaurants with celebrity chefs and lounge operators.
Merchants is also in talks with various groups from around the world to run the spa, which encompasses two luxurious pools, outdoor rain showers and VIP cabana areas.
Merchants and its real estate group, led by Adam Hochfelder, developed — and own — several luxury hotels including the Hyatt Andaz at 485 Fifth Ave. and the Beekman Tower Hotel by the United Nations, as well as residential buildings and restaurants that include Philippe by Philippe Chow.
Reisner and business partner Mati Weiderpass kicked up a storm last year after hosting an intimate get-to-know-us fundraiser for GOP Sen. Ted Cruz.
Requests for comment were not returned by press time.
Merchants Hospitality is coincidently a minority partner in the Brill Building ownership led by Bruce Brickman and Eric Hadar’s Allied Partners. As I’ve previously reported, that landmarked office and retail building at 1619 Broadway was being sold through the JLL Capital Markets’ vice chairmen, Ron Cohen and Richard Baxter.
Earlier this month, with construction finally done but deadlines for closing on financing looming, as The Post’s Steve Cuozzo reported yesterday, the buyer group — Schottenstein Property Group, B+B Capital, Fox-Wizel and Conway Capital — came in as partners to recapitalize the building with a 40 percent stake.
But real estate mavens tell me that the 40 percent stake is actually a conversion of the group’s $20 million deposit to a percentage of the equity already in the building. Despite a close-or-lose clause, the sellers and buyers would have battled in court for years over the return of that deposit. The conversion to equity became the fastest solution to move the pending lease deals forward and get income onto the ledger books.
The coworking site Knotel has signed a lease for 35,286 square feet covering the second through seventh floors of the 12-story 22 W. 38th St. in the Times Square South/Garment Center area.
Peter Braus, Dennis Someck and Mitchell Kunikoff of Lee & Associates NYC represented the tenant in the 15-year deal.
William Cohen, David Emden and JD Cohen of Newmark Grubb Knight Frank represented building owner Dalan Management, which purchased the structure in December 2015 and conducted a major renovation including a new lobby and new elevators and windows. CoStar shows the asking rent at $54 per square foot — with the remaining upper floors of 5,881 square feet featuring windows on all four sides with a higher asking rent: $60 per square foot.
Nike has now officially lost out on the former FAO Schwarz space at 767 Fifth Ave. The CEO of Under Armour’s confirmed our report, saying his company will be leasing the prominent spot near the Apple “cube.”
The clickbait platform Taboola, which posts intriguing stories that drive you to other Web sites, is moving and expanding to 1115 Broadway by Madison Square Park.
Jared Freede and Ben Friedland of CBRE represented the tenant in the 48,010-square-foot lease that will cover the seventh and eighth floors of the 12-story building.
James Buslik and Jeff Buslik of Adams & Co. represented the ownership which, according to CoStar, had an asking rent of $62 per square foot.
