Sharif El-Gamal’s Soho Properties has closed on a $317 million refinancing of its recently completed Margaritaville Resort Times Square.
Leading the financing was senior lender Bedrock Capital Associates LLC, the real estate finance affiliate of One William Street Capital Management, while mezzanine funding came from South Korea’s Hana Financial Investment, Soho Properties said in a statement on Monday. The refinancing was the largest for a New York City hotel property so far this year, according to the developer.
The 70,000-square-foot, 234-key hotel opened in June. The 32-story property cost $400 million to develop. Soho Properties acquired the site in 2014 and agreed to find a new home for the Garment Center Congregation synagogue that originally stood there.
The hotel opened its doors at a time of turmoil for the lodging industry. Data from Trepp last November showed that more than 80 percent of New York hotels that are backing CMBS loans, equivalent to $3.1 billion, were under strain due to the pandemic.
“Hotel and retail assets are not easy to finance today,” Soho Properties CEO and Chairman Sharif El-Gamal said in today’s statement. “We’ve built something incredible.”
The project has a long history. Soho Properties and partner MHP Properties purchased the site with a $63 million loan from Colony Capital, planning a 29-story mixed-use building anchored by a Dream Hotel.
After the joint venture defaulted on the loan when it matured, investor Eli Cohen bought the distressed note, in May 2017, and had an option to foreclose on the site. El-Gamal said a $270 million construction loan in 2019 from Related and Angelo Gordon retired Cohen’s $85 million debt in the project.
The construction loan was backed by Related Fund Management, the debt arm of Related Companies, and investment firm Angelo Gordon, as well as mezzanine lender Hana Financial.
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