NEW YORK CITY-Madison Realty Capital reports the closing of a $27-million first mortgage loan for the Paper Factory Hotel in Long Island City and several hotel properties in Brooklyn

The financing will be used to repay existing construction financing for the Paper Factory project at 37-06 36th St. In addition, the borrower will also use the financing for the purchase and repositioning of two contiguous buildings currently operating as short-term stay hotels located at 1109-1111 Manhattan Ave. and 66-80 Clay St. in the Greenpoint section of Brooklyn.

The borrower purchased the six-story 81,000 square-foot Long Island City warehouse that served as a paper factory industrial property for years in September 2012. The borrower spent the last year renovating the property into a 122-room loft hotel. The finishing touches are currently being added to the location, which is now substantially complete and is expected to open later this month, Madison Capital officials state. The property includes a gym, office, conference and meeting space. The first floor features a  modern lobby, restaurant, gift shop, and computer stations.

The 1109 Manhattan Ave. property in Brooklyn is a four-story, 22,875 square-foot hotel offering 101 rooms. The other Brooklyn acquistion at 66-76 Clay Street is a three-story, 21,000 square-foot hotel with 91 rooms. The borrower intends to pursue an aggressive renovation strategy and reposition both properties.

"Our experience funding similar projects throughout New York City allowed us to understand this borrower's needs, facilitate a suitable structure and close the deal, all in a relatively quick timeframe," said Joshua Zegen, co-founder and managing member of Madison Realty Capital. "The outer boroughs are becoming increasingly desirable locations for lodging, particularly for tourists looking for affordable alternatives to Manhattan hotel stays. We are pleased to have provided the financing for this latest transaction and look forward to the completion of this unique hotel portfolio."

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