Real estate investment firms The Kash Group and Shel Capital are in contract to acquire the 117-key Morgans Hotel in Murray Hill.
The 17-story property, located at 237 Madison Avenue, was bought for $41 million, according to the Real Deal. The joint venture plans to convert the hotel, which was built in 1927 with designs from Andrew Thomas, into micro-unit condominiums.
“There is significant upside potential in the conversion of this architecturally distinctive, historical property, in a neighborhood with a distinctive community feel and convenient access to midtown,” said Shlomo Bakhash, the president of Kash Group. “When completed, the property will offer residents an urban oasis in a market that has limited competitive properties of this type and continuing strong residential demand. We will be introducing an exciting, innovative and groundbreaking new product to this market,” he added.
The 71,000 s/f property will be delivered vacant. Kash Group and Shel Capital are planning capital improvements on the site as part of the residential conversion.
Shel Capital, which is led by co-founders Jonathan Bakhash and Rony Kravel, owns a collection of apartment buildings in Brooklyn. These include 770 St. Marks Avenue, 601 Greenwood Avenue and 286, 288 and 290 Clinton Avenue. The Kash Group, meanwhile, owns extended stay hotel The William at 24 East 39th Street.
The seller is Felcor Lodging Trust, which recently entered a $7 billion merger with RLJ Lodging Trust. Felcor has two Manhattan hotels remaining in its portfolio. These include The Knickerbocker at 1466 Broadway and the Royalton New York at 44 West 44th Street. The deal is expected to close next month.