Plans call for the residential conversion of the iconic hotel, which was originally designed in 1927 by architect Andrew Thomas, and completely renovated in 1984. The hotel will be delivered vacant, followed by major capital improvements for the future conversion of the 71,000-square-foot property.

“This was a rare opportunity to acquire an iconic asset with an irreplaceable location, within close proximity to The Morgan Library Museum, Bryant Park, Grand Central Station and all of the neighborhood's exceptional dining, shopping, cultural and business destinations,” says Kravel.

“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,” adds Bakhash. “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.”

NEW YORK CITY—A partnership of the Kash Group and Shel Capital is in contract to acquire the Morgans Hotel NYC for $41 million. After the closing, the property will be converted to residential use.

The two New York City-based real estate investment firms are purchasing the hotel at 237 Madison Ave. from FelCor Lodging Trust, which announced in April that it plans to merger with fellow hotelier RLJ Lodging Trust of Bethesda, MD in a $7-billion deal.

Irving, TX-based FelCor announced in its first quarter financial report released on May 9^th that it had finalized agreements to sell its 117-room Morgans Hotel NYC, as well as its 168-room Royalton New York Hotel at 44 West 44^th St. In its announcement, the REIT did not reveal the identity of the buyers of the properties.

The announcement of the contract to purchase the Morgans Hotel NYC property was made by Shlomo Bakhash, president of the Kash Group, and Rony Kravel and Jonathan Bakhash, co-founders of Shel Capital. A closing on the property is scheduled for sometime next month.

Plans call for the residential conversion of the iconic hotel, which was originally designed in 1927 by architect Andrew Thomas, and completely renovated in 1984. The hotel will be delivered vacant, followed by major capital improvements for the future conversion of the 71,000-square-foot property.

“This was a rare opportunity to acquire an iconic asset with an irreplaceable location, within close proximity to The Morgan Library Museum, Bryant Park, Grand Central Station and all of the neighborhood's exceptional dining, shopping, cultural and business destinations,” says Kravel.

“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,” adds Bakhash. “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.”