Capstone, Highgate source loan to buy former New York W hotel

(Image: Highgate) The Maxwell, New York, NY. Photo credit: Highgate

LoanCore Capital has granted Capstone Equities and Highgate a $170-million loan to finance the acquisition of the former W Hotel at 541 Lexington Avenue in New York. 

The package includes a $140-million loan to finance the hotel purchase, a $20.5-million project loan and a $9.5-million construction loan, covering 90 percent of sale price. Capstone and Highgate agreed to pay $190 million to acquire the 700-room 14-story hotel, which was recently renamed The Maxwell. Real estate investment bank Eastdil Secured brokered the financing deal.
 
Hotel investment firm Host Hotels & Resorts agreed to sell the former W Hotel to Capstone and Highgate in February 2018. This is Capstone and Highgate's most recent hotel purchase together, following their acquisition of the Nyma Hotel in the Koreatown neighborhood for $52 million in 2017. Highgate currently manages the 17-story 171-room hotel and owns a small share along with Republic Hospitality, according to The Real Deal. The sale closed in August 2017 for $304,000 per room. 

This is LoanCore's latest loan this month. The lender owned by Singapore's GIC and the Canadian Pension Plan Investment Board granted $100 million for commercial mortgage-backed securities refinancing of a warehouse in Brooklyn. The group also granted a loan totaling $42 million for a retail development in Midtown East along with another $27 million to finance a creative office building in Long Island City, Queens. 

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


The hotel sale involves the second W location to change hands this week. Westbrook Partners acquired the 270-room W hotel in Union Square in a $168-million deal with Host Hotels & Resorts. The W brand’s current portfolio in New York includes two properties—one in Times Square at 1567 Broadway and another in the Financial District at 8 Albany Street—according to The Real Deal.

Suggested Articles

The absolute occupancy and RevPAR levels were the lowest for any Q3 in STR’s U.S. database.

Implementation of Volara’s contactless guest engagement and touchless room controls system is part of a rollout by Viceroy Hotels & Resorts.

U.S. hotel occupancy was virtually flat at 50.1 percent during the week of Oct. 11-17, according to the latest data from STR.