A development site in Manhattan’s West Chelsea area, originally planned for a hotel and luxury residences, has changed hands. Amsterdam-based PPHE Hotel Group sold the property at 538-542 West 29th Street to Brooklyn-based T&E Development for $33.5 million, with the deal closing late Thursday afternoon.
Colliers represented the seller with a team led by Zach Redding, Dylan Kane and Jared King. Sporn Group’s Lenny Sporn arranged the sale on behalf of the buyer. Crain’s New York Business first reported the deal was set to close this summer.
The 9,875-square-foot vacant lot between 10th and 11th avenues carries 74,063 square feet of development potential under the city’s C6-3 zoning within the Special West Chelsea District. According to Colliers, the site will not require an affordable housing component.
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A project that shifted with the market
PPHE announced in March 2019 that it had formed a joint venture with developer Largo to acquire the lot for around $42 million, with plans to build a 98-key hotel and 55 condos. An entity connected to the firm filed demolition permits for the project in late 2023.
Greg Hegarty, co-CEO of PPHE, said in a February statement on the pending sale that “significant changes to the regulatory environment” for ground-up development of hotel projects in New York following its 2019 acquisition contributed to the decision to part ways with the property.
The sale price sits about $8.5 million below what the company paid for the land six years ago, a gap that reflects how much the development climate has shifted since the original plans took shape.
What the buyer brings to the site
T&E recently completed a 54-unit condo development called the Florian at 350 East 18th Street in Manhattan’s Gramercy Park neighborhood. The firm has not disclosed specific plans for the West Chelsea site.
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Redding said the property is one of the few remaining unconstrained development sites in West Chelsea and would be well positioned as a residential project given there is only one condo building currently under construction between West 20th and West 30th streets. He noted that nearby condo developments have netted average sales of roughly $2,884 per square foot and that Chelsea pricing is up 44 percent since 2020, the largest five-year increase of all Manhattan submarkets.
“Cost and rate volatility has pushed nearly every new New York City project toward the trophy buyer because sellouts north of $3,000 per foot can absorb unforeseen costs,” Redding told CO. “The deeper part of the market — buyers looking in the $2,000 to $2,700 range — has been left unserved. If it’s built as condos, this will be one of the few projects delivering into that segment in three to four years.”
The lot’s location between 10th and 11th avenues puts it within walking distance of the High Line and Hudson River Park, though the immediate block remains a mix of warehouses and newer residential buildings. T&E Development did not immediately return a request for comment on the purchase or its timeline for the site.
