investigation
Hiwin Group’s customer buys with a 44% reduction compared to the 2018 price
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Hidrock Properties is taking a dip in a Financial District hotel where it planned to build a 30-story hotel.
He sold the parcel at 112 Liberty Street to Queens developer Hiwin Group USA, which expired last month, for just under $22 million, records show, 44% less than what Hidrock paid six years ago.
A regulatory hurdle that New York City imposed in 2021 on hotel progression may be just the cause.
The city council and de Blasio’s administration demanded that new hotel proposals go through the lengthy and costly process of land use review, even when zoning allowed it, a law that froze hotel construction.
Although hotel projects submitted prior to the 2021 agreement were exempt, a six-year deadline was also set for finalizing those “acquired” progression proposals.
After submitting plans in March 2019 to build the hotel, Hidrock had only a year left to complete the task, a practical impossibility if an existing foundation existed.
Meanwhile, monthly debt service bills have eaten away at Hidrock’s equity at the site. In 2021, it owed $23. 5 million to lender Emerald Creek Capital for the property, meaning the sale could have wiped out Hidrock’s investment entirely.
Hidrock did not promptly respond to a request for comment. Anthony Hu, Hiwin’s chief executive, declined to comment. The sale was previously published on Traded.
A year ago, Hidrock lost a location in Lower Manhattan where he planned to open a hotel, at 140 Fulton Street, after Israel’s Hapoalim Bank sued him for non-payment of the mortgage. Hidrock is pleased with the decision.
Land values in New York have yet to recover from the pandemic and remain between a quarter and a third below their pre-Covid value, according to experts.
In addition to limitations on building new hotels, land costs remained subdued due to a shrinking market and the expiration of 421a, a tax break for multifamily development.
This leaves it up to developers to build condominiums, a proposal for Hiwin Group.
The company temporarily sold its first condo, a 69-unit offering at 300 West 30th Street. He recently bought two parcels near Penn Station with plans to build condos, Crain reported.
The company may simply be looking for the assignment of condominiums in its new Financial District territory. At the moment, there’s not much else to do with that, even though state lawmakers are in talks to update the 421a.
Kathryn Brenzel contributed reporting.