MCR, Island Capital Group sign $260M refi with Fortress for hotel in Midtown West

MCR and Island Capital Group through the entity Snyts Owner LLC as borrower signed a refi loan with lender Fortress Investment Group through the entity Fortress Credit Co LLC valued at $260 million for the Sheraton New York Times Square Hotel (H1) at 811 Seventh Avenue in Midtown West, Manhattan.
The deal closed on November 13, 2023 and was recorded on December 4, 2023. The prior lender was Host Hotels & Resorts which held debt that had an original loan amount of $250 million.The property has 1,172,021 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $221 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The owner bought the property on April 19, 2022, for $323.3 million. The signatory for MCR and Island Capital Group was William White. The signatory for Fortress Investment Group was David N. Brooks. MCR and Island bought the hotel in 2022 for $323.3 million from Host Hotels & Resorts. Host Hotels & Resorts gave a purchase money mortgage for $250 million. The Fortress loan is refinancing that and adding $10 million. MCR has also used the names MCR Hotels and MCR Development.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Jeffrey Clark, head officer and Sean Verney, agent. The business entities are Marriott Hotel Services and Snyt Llc.

The property

The hotel building in Midtown West has 1,172,021 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 305 feet deep with a total lot size of 60,774 square feet. The lot is irregular. The zoning is C6-6 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $266.7 million. The most recent loan totaled $250 million and was provided by Host Hotels & Resorts on April 19, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received four DOB violations and $17,480 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.3 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 19.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 25 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the three commercial properties representing 2,654,229 square feet of the 2,654,229 square feet. The two identified owners are Paramount Group and Island Capital Group.
There are no active new building construction projects on this tax block.

The majority, or 56 percent of the 2.7 million square feet of built space are office buildings, with hotel buildings next occupying 44 percent of the space.

The borrower

The PincusCo database currently indicates that Island Capital Group owned at least one commercial property in New York City with 1,172,021 square feet and a city-determined market value of $266.7 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single hotel property. It is located in Manhattan.

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