City Club Hotel Secures $36M Refi

NEW YORK CITY-Starwood Property Trust has refinanced the City Club Hotel, at 55 W. 44^th St., for $36 million, including $13 million in construction financing. The deal will allow an additional 66 rooms to be added above those already existing at the hotel.

Jared Kelso and Ernest Lee of Cushman & Wakefield Sonnenblick Goldman’s US Hospitality Group worked the deal on behalf of the owners, City Club Hotel LLC.

"The availability of creative capital for the hospitality sector continues to increase with each passing month," Kelso, a senior director at Cushman & Wakefield Sonnenblick Goldman said in a prepared statement. "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."

This hotel deal is one of many in the New York area of late. Though he was unavailable for comment, Kelso spoke to GlobeSt.com recently about the tremendous amount of capital available in top markets for hotels, as sophisticated investors search far and wide for deals.

"There is no question that New York City numbers one, two and three most of the public companies’ acquisition target lists," he said. "We’re seeing knowledgeable hotel investors scouring the landscape--there’s a ton of money out there."

Boyd Fellows, president of Starwood Property Trust, tells GlobeSt.com that the deal was complicated, but just the type of transaction that Starwood is able to pull off--and in under 30 days in City Club's case. "When they came to us they had a looming maturity on their prior loan that we paid off and the transaction that they wanted to accomplish was fairly complex," Fellows says. "It's really a combination of a bridge loan and a construction loan. In order to pull that together and deliver as we did was not a small endeavor."

The Starwood senior primary correspndent who put the loan together, Stuart Silberberg, says that the strength of the hotel market in New York made the timing right. "Hotel performance in New York has been pretty strong over the last 12 months--the market has definitely rebounded," Silberberg says. He adds that the construction process for the additional rooms is expected to last no longer than 12 months. "It's a fairly straightforward construction project," he says. "We would think that no later than the second quarter of 2013 the hotel would be up and open."