Kailas Companies has secured a $120-million bridge loan and preferred equity investment originated by Access Point Financial and TMGOC Ventures to recapitalize the recently completed conversion of an office building in downtown New Orleans to a project anchored by a dual-branded 250-key Fairmont by Accor and 216-key Element by Westin. The project also includes a Emeril’s Delmonico restaurant and 150,000 square feet of Class A office space.
The transaction was brokered by Russ Schildcrout of Ackman-Ziff.
“Naveen Kailas and Kailas Companies are an ideal hotel partner with a strong and respected local presence that knows the New Orleans market intimately,” said Dana Tsakanikas, chief investment officer, APF. “With an established track record of 36 years, Kailas owns and operates a portfolio of office, multifamily and retail properties within and around The Crescent City, accounting for over two million square feet of building space. Access Point Financial looks forward to the project’s success and maintains its desire to work with best-in-class partners like Kailas Companies.”
Built in 1970 as a 31-story office building, the Skidmore Owings & Merrill-designed tower was acquired by Kailas in 2014 with the intention of being converted into hotel space. Initial conversion construction commenced in January 2024.
“As we continue to expand our footprint and revitalize historic properties throughout the New Orleans market, it becomes increasingly important for us to work with well-respected credit firms who know the hospitality industry intimately,” said Naveen Kailas, Kailas Companies. “APF and TMGOC have lived up to their reputation, delivering the right solution to meet our needs.”
“Having worked together on numerous projects over the past years, we have come to know and respect the APF team,” said Sunju Patel, managing partner, TMGOC, a real estate development and private equity firm. “Specializing in hospitality, they bring a depth of knowledge to these types of hotel deals that is unparalleled and that gives us further confidence in the strength of these deals.”
The property is located in New Orleans’ central business district, one block away from Canal Street and a few blocks southwest of the French Quarter, just a short walk from Caesars Superdome. The area houses several demand drivers, such as Tulane University, LSU Health Sciences Center, Caesars Superdome and the Biomedical District.
“Our partnership with APF on this recapitalization validates the thesis behind our preferred equity and mezzanine credit platform,” said Glenn Alba, managing partner, TMGOC Ventures. “We’re pleased to align with Kailas Companies on this landmark New Orleans asset and to deliver flexible capital to best-in-class sponsors.”