Developer Jeff Sutton’s proposed Midtown hotel has reportedly scored its first tenant.
Short-term rental provider Sonder signed on to the planned 363-room hotel at 25 West 34th Street with a $300 million lease that will last 15 years, a person familiar with the deal told the Commercial Observer.
Sutton filed a permit in April for the construction of the 176,000-square-foot hotel. A 16,000-square-foot retail space on the ground floor operated by fashion company Superdry will be controlled by Sutton’s Wharton Properties.
Developing a new hotel was seen as a risky proposition when plans were filed, as the hospitality industry struggled under the weight of the pandemic. With Sonder, Sutton is aligning with a company that has been withstanding the effects of Covid well.
In June, the hospitality startup inked a long-term lease for the 76-key Gowanus Inn & Yard at 645-651 Union Street in Brooklyn. The deal was the first in the borough for the San Francisco-based company, which previously specialized in offering furnished apartments as short-term rentals before it expanded into hotels.
The deal came just two months after the company confirmed that it was going public by merging with a SPAC backed by Alec Gores and Dean Metropoulos. Reuters reported at the time that the company had a valuation of $2.2 billion in the deal and anticipated reaping $650 million from the offering.
Sonder and Sutton are likely hoping for a better hotel picture by the time the place gets up and running. CBRE last week forecast hotel occupancy in the city to reach 56 percent during the fourth quarter, only a slight increase from the third quarter and below historic holiday levels.[CO] — Holden Walter-Warner
Business News Governmental News Finance News
Need Your Help Today. Your $1 can change life.