JV Plans $90M Hotel Development

NEW YORK CITY-HREC Investment Advisors successfully represented West 37th Street Owner LLC and Englewood, CO-based Stonebridge Realty Advisors Inc. in formulating a joint venture to develop a 220-room select service hotel on West 37th St., between 8th and 9th Avenue. Estimated project cost is $90 million and debt and equity placements are nearing completion, a testament to the strength of the project and the development team in a difficult capital market.

The project is currently being contemplated as boutique hotel or a primary brand in the select service category. This will be Stonebridge’s first project in Manhattan. Kevin Mahoney, COO of Stonebridge, tells GlobeSt.com that the address of the site is 307-311 W. 37th St.

Mahoney explains that they will begin construction “by year end,” and expects to have construction completed in 2010. He tells GlobeSt.com that the total square footage of the hotel will be roughly 96,500 sf, noting that “the number of stories is still to be determined.”

Mahoney says that the financing is coming from a “well capitalized equity source and bank financing,” but did not further detail specifics. Currently in the location is a three-story distribution center that “will be razed.” Mahoney says that the firm has been looking in the New York City market for approximately two years.

Navin Dimond, president and CEO of Stonebridge Cos. says in a prepared statement that “Stonebridge continues to grow and we have been looking at the New York market for some time, but felt this project had all the right ingredients in terms of location, concept and upside potential of the area.”

Dimond continues that Stonebridge plans to grow its platform on a national basis and looks forward to doing additional projects in New York. “HREC’s ability to bring us an off-market deal was a key factor in structuring an equitable deal for us and our JV partner.”

Geoff Davis, president of HREC Investment Advisors says in a prepared statement that, HREC has worked extensively with Stonebridge in other markets and “expect they will be very successful on the big stage of New York, they know how to get a project done on time and on budget.” Davis was unavailable to answer further queries by deadline.