NEW YORK CITY A boutique hotel near Times Square is set to double in size after securing US$36 million in loans from a REIT controlled by Starwood Capital Group.
Starwood Property Trust, in conjunction with Cushman & Wakefield Sonnenblick Goldman, have completed US$23 million in refinancing and an additional US$13 million in construction financing for the 65-key City Club Hotel. The loan will allow for the construction of up to 66 additional guestrooms to be built above the existing hotel, best known as the home of Chef Daniel Boulud’s DB Bistro Moderne.
“This transaction is a great example of maximizing Starwood’s capabilities—we were able to complete a highly structured, flexible deal on a transitional asset within a very short time period,” says Boyd Fellows, president of Starwood Property Trust. “In New York, as in several of the nation’s major metropolitan markets, hotel values have been buoyed by the strength of tourism and a rebound in corporate travel, which is driving high occupancy and rates.”
The owner, City Club Hotel LLC, hopes to achieve city approval for the expansion by the end of this year. The hotel opened in 2001 following a renovation of the existing nine-story historic building.
Jared Kelso and Ernest Lee of Cushman & Wakefield Sonnenblick Goldman’s U.S. hospitality group represented the owner in arranging the financing.
“The availability of creative capital for the hospitality sector continues to increase with each passing month,” Kelso says. “We were pleased to secure financing in an incredibly short time frame from a lender who has a deep understanding of the New York City hotel market and recognized the demand for additional rooms at this exceptional hotel. Their ability to structure a nonrecourse construction financing component speaks volumes about the outlook and availability of capital for high quality hospitality assets, particularly in major markets.”