NEW YORK CITY — Morgan Stanley Mortgage Capital Holdings LLC has provided $275 million in financing for the acquisition of the fee position in the Milford Hotel in New York City. Meridian Capital Group LLC and Eastdil Secured, a subsidiary of Wells Fargo Bank, arranged the 10-year, fixed-rate, interest-only CMBS loan on behalf of a partnership between David Werner and Deutsche Asset & Wealth Management’s real estate investment business.
The partnership acquired the fee interest from Rockpoint Group and hotel operator Highgate Hotels for $325 million. In February, The Wall Street Journal reported that Rockpoint and Highgate had plans to sell the property in three parts — the land under the building, the hotel and the 26,000-square-foot retail space — for an estimated $650 million. The fee position is the underlying land, according to Meridian Capital Group.
“We are pleased to add this high-quality investment to our client’s portfolio,” said Todd Henderson, head of real estate for the Americas at Deutsche Asset & Wealth Management, in an earlier statement. “Acquiring the leased fee interest in a prime New York City location is expected to provide strong and durable long-term returns.”
The 1,331-room hotel unit is located at 700 Eighth Ave., between West 44th and West 45th streets. When it was built in 1928, it was the largest hotel in New York City, according to the hotel’s website.
Guests of the hotel have access to both New York’s Times Square area and Theatre District. In addition, the hotel features a new 8,700-square-foot lobby, a 2,900 square foot indoor/outdoor rooftop bar and a state-of-the-art fitness center.
The property’s infrastructure has also been upgraded and modernized to more energy-efficient standards as part of a recent capital improvement plan.
Abe Hirsch and Peter Steier of Meridian’s New York City headquarters and representatives of Eastdil Secured negotiated the transaction.
— Rachel Goff