NEW YORK, NY—Meridian Capital Group, LLC, a national commercial real estate finance and advisory firm, negotiated $115 million in acquisition and construction financing for the purchase and redevelopment of the Flatotel hospitality property, here, on behalf of a partnership between Chetrit Group and Clipper Equity.
The three-year, non-recourse, interest-only loan features a floating LIBOR-based interest rate and a one-year extension option. Meridian Managing Director Ronnie Levine and VP Emanuel Westfried, both based in Meridian’s New York City headquarters, negotiated this transaction.
Currently, the vacant 47-story Flatotel property is configured as a 288-room hospitality property with 14,000 sq. ft. of meeting space. The Chetrit Group and Clipper Equity team plans to convert the asset into a five-floor boutique office condominium and a 37-floor luxury residential condominium. The approximately 64,400-sq.-ft. office condominium component will be located on floors two through seven of the building, and the approximately 173-unit residential condominium will span floors eight through 47. The total project cost is presently estimated at $250 million.
The Chetrit Group and Clipper Equity team acquired the property from a venture between Rockpoint Group, Atlas Capital and Procaccianti Group. Both parties have significant experience with conversion and development projects in the New York metro area including the Empire Hotel, Hotel Chelsea, BellTel Lofts and Columbus Square projects.
“The financing universe for large-scale residential condominium conversion projects remains constrained. However, Meridian was able to identify several capital sources interested in financing the transaction on a non-recourse basis. We ultimately chose to move forward with the lender that provided superior economic terms coupled with the flexibility in structure that will enable the borrower to best execute their business plan,” Levine said in a statement.
The Flathotel is located at 135 West 52nd Street, between Sixth Avenue and Seventh Avenue, in the heart of Midtown Manhattan. This location affords residents of both the office and residential condominiums access to many New York City attractions including Central Park, Columbus Circle, Rockefeller Center, Times Square and the Museum of Modern Art, in additional to numerous restaurants and retail destinations.