NEW YORK CITY-The Carlton Group has announcedthat its chairman, Howard Michaels, has organizedan equity partnership between hotelier IanSchrager, a real estate developer and brokerage firm toform a joint venture to buy an equity stake in 156-162 Leroy St.,along with the adjacent corner parcel, 357-363 West St. The assetis owned by AREA Property Partners, which lastmonth announced it would be acquired by Los Angeles-basedAres Management.

Schrager's partners on the deal are HowardLorber, chairman of residential brokerage companyDouglas Elliman and head of the VectorGroup; and Steven Witkoff, a developerand head of the Witkoff Group, which owns 20buildings—including the famed Woolworth Buildingin Lower Manhattan. Schrager is best known as the co-owner andco-founder of Studio 54. He went on to createbuzz-worthy boutique hotels.

Carlton also arranged senior debt financing for the project froma non-New York balance sheet lender, which Carlton says in thepress release is, “particularly artful given that the property island and still has to receive a residential zoning variance.”Michaels, who specializes in putting together equity partnershipsand highly leveraged multi-tranched debt solutions, put the sametrio of buyers together last year when the group acquired a majordevelopment site (with Ziel Feldman) on ChrystieStreet to build a new Schrager branded condominium andhotel. Michaels also has put together one other largeManhattan hospitality transaction with Schrager, Witkoff andLorber, which is slated to be announced soon.

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Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.