NEW YORK CITY — New York City-based Meridian Capital Group LLC negotiated $115 million in acquisition and construction financing for the purchase and redevelopment of the Flatotel, a 47-story vacant hotel in New York City. Meridian arranged the loan on behalf of the borrower, a partnership between Chetrit Group and Clipper Equity.
Chetrit Group and Clipper Equity have previous experience with hotel conversions and renovations in the New York City metro area, including the Empire Hotel, Hotel Chelsea, BellTel Lofts and Columbus Square. The partnership purchased the vacant hotel from a venture between Rockpoint Group, Atlas Capital and Procaccianti Group.
The Flatotel property is currently configured as a 288-room hotel with 14,000 square feet of meeting space. Chetrit and Clipper plan to convert the asset into a five-floor, 64,400-square-foot boutique office condominium property and a 37-floor, 173-unit luxury residential condominium property. The office component will span floors two through seven and the residential portion will span floors eight through 47. The buyer estimates the cost for the repositioning at $250 million.
Ronnie Levine, managing director of Meridian Capital Group, and Emanuel Westfried, the firm’s vice president, arranged the loan. The three-year, nonrecourse, interest-only loan features a floating LIBOR-based interest rate and a one-year extension option.
“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 nonrecourse basis,” says Levine. “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 its business plan.”
The Flatotel is located at 135 West 52nd St. in Midtown Manhattan, between Sixth and Seventh avenues. Future residents and employees of the converted property will have access to Central Park, Columbus Circle, Rockefeller Center, Times Square and the Museum of Modern Art.
Meridian Capital Group is a national commercial real estate finance and advisory firm that arranges loans ranging from $1 million to $500 million. Meridian has offices in New Jersey, Maryland, Illinois, Florida, Arizona and California.
— John Nelson