The project will be developed and built by Slate, and upon completion will be owned and operated by Breaking Ground, ensuring long-term affordability under a mission-driven non-profit.
Slate Property Group, a private New York City based owner, operator, developer, and lender, and Breaking Ground, New York’s largest non-profit supportive housing developer, announced the completed acquisition of the Stewart Hotel in Midtown Manhattan – the first step toward an innovative hotel-to-residential conversion project that will deliver more than 575 permanently affordable apartments.
Slate and Breaking Ground acquired the hotel at 371 Seventh Avenue for $255 million. Construction is set to begin late next year, converting the hotel into 579 homes for low-income households and formerly homeless individuals. The project brings together multiple novel financing tools, including New York State’s Housing Our Neighbors With Dignity Act (HONDA) and the Department of Social Services’ NYC 15/15 Supportive Housing Initiative.
Because the hotel’s floor layouts are highly compatible with residential living, interior work can begin immediately, reducing the construction timeframe to just 24 months compared to 36 months for conventional ground-up construction.
“Permanently affordable housing on this scale just doesn’t happen in Midtown. This project combines extraordinary scale, rapid construction and long-term stewardship by a respected non-profit. It is THE model for how New York City can break through and make a real dent in this affordability crisis,” said David Schwartz, Co-Founder and Principal of Slate Property Group. “Thanks to our partnership with Breaking Ground and the support of the City and State, we’re bringing out-of-the-box thinking to New York’s housing landscape to deliver the affordable homes New Yorkers deserve.”
“The Stewart Hotel presents an unparalleled opportunity to generate affordable and supportive housing in the heart of Midtown Manhattan,” said Brenda Rosen, CEO of Breaking Ground. “As the latest example of our adaptive reuse model, this project will create nearly 600 affordable and supportive homes while preserving a bit of New York City history. With so many New Yorkers facing homelessness, mental health challenges, and a shortage of stable housing, this conversion will have a great impact for the city. For the individuals and families who will soon call this building home, it represents stability, and the chance to build a better future. We are thankful for Slate’s partnership and for the critical contributions of our State, City, and financing partners to make this vision a reality. This is how we use every tool available to meet the needs of our city.”
Located across from New York Penn Station, the Stewart is a 31-story, 611-room hotel that shuttered in 2022. The hotel has a 100-space underground parking garage, 12,000 square feet of ground-floor retail, and 3,500 square feet of ballroom space. The site is within a few blocks of more than a dozen New York City subway lines, LIRR and NJ Transit.
Breaking Ground was founded 35 years ago to convert historic hotels into supportive and affordable housing, and this will mark the agency’s sixth residential conversion project, including the Times Square (1993), Prince George (1999), The Christopher (2004), 90 Sands (2022), and 1760 3rd Avenue (anticipated 2026). This is Slate’s second major hotel-to-residential conversion, following the completion of the Baisley Pond Park Residences in Queens – the first hotel conversion under New York State’s HONDA law – earlier this fall.
For the Stewart’s conversion, Slate will replace all major building and mechanical systems, upgrade LED lighting, and merge adjacent hotel rooms, as needed, into comfortable living spaces. Rents for low-income apartments will range from $1,385 to $1,731. New office space will be constructed for on-site social services, with all formerly homeless tenants receiving support to maintain housing stability and improve holistic health, and older adults receiving individualized on-demand assistance, such as unit safety and access modifications, specialized health care referrals, and planning needs, including wills, health care proxies, and powers of attorney. The building will also have fulltime security and maintenance staff.
Following construction, Breaking Ground will retain long-term non-profit ownership and management of the building. Breaking Ground will also provide onsite support and wrap-around services for residents as they transition from homelessness to permanent affordable housing through a contract with the New York City Department of Health and Mental Hygiene. All tenants at the Stewart will also have access to Breaking Ground’s signature Tenant360 program, a portfolio-wide suite of services delivering socialization, recreation, and education opportunities.
Total development costs, including acquiring the hotel site, are projected at $500 million, of which $86.85 million is being provided through New York State’s Hotel and Commercial Conversions Program created through state HONDA legislation. The remaining capital is being provided through a combination of City, State, and private funding sources, including New York City Housing Development Corporation (HDC) tax exempt bonds and New York City Housing Preservation and Development’s (HPD) Supportive Housing Loan Program. Acquisition financing was provided by Wells Fargo and JPMorgan Chase, along with the Low Income Investment Fund, LISC Fund Management, and the Corporation for Supportive Housing. The project will also receive historic tax credits and Low Income Housing Tax Credits through the New York State Department of Homes and Community Renewal (HCR), and the use of transferable development rights controlled by Breaking Ground, which reduced financing needs for the acquisition.
