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.
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.