Strategic Hotels & Resorts signs $97.8M refi loan with Goldman Sachs for Essex House hotel in Midtown West

Strategic Hotels & Resorts through the entity Dtrs Essex House, LLC as borrower signed a refi loan with lender Goldman Sachs through the entity Goldman Sachs Bank USA valued at $97.8 million for two hotel condominium units that form the hotel at the JW Marriott Essex House New York 160 Central Park South in Midtown West, Manhattan.

The deal closed on August 12, 2022 and was recorded on August 30, 2022. The prior lender was MetLife which held debt that had an original loan amount of $75 million. The two condo units have 321,136 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $304 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 signatory for Strategic Hotels & Resorts was Michelle Curttright. The signatory for Goldman Sachs was Robert Kivell. The prior debt totaling $75 million was paid off in May 2022. The owner is an affiliate of the REIT Strategic Hotels & Resorts. The Chinese insurer Anbang Insurance Group bought a portfolio of 16 hotels including JW Essex House from the Blackstone Group for $6.5 billion but after the Chinese government took over the insurer after alleging financial improprieties, Anbang sought to sell the portfolio to a Korean investment firm, but the buyer backed out during Covid in a case that was under appeal in Delaware as of late 2021.

The property

The larger of the 160 Central Park South condo units has a total lot size of 233,139 square feet. The city-designated market value for the property in 2022 is $160.2 million.The most recent loan totaled $75 million and was provided by MetLife on December 29, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Midtown West, the majority, or 73 percent of the 77.7 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Midtown West has the 5th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, Midtown West is the 2nd most active neighborhood among other neighborhoods. It had 12 million square feet of commercial and multi-family construction under development in the last two years, which represents 15 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 the tax block of 160 Central Park South, PincusCo has identified the owners of two of the 12 commercial properties representing 321,136 square feet of the 898,962 square feet. The identified owner is Strategic Hotels & Resorts.
There are no active new building construction projects on this tax block.

The majority, or 65 percent of the 542,982 square feet of built space are hotel buildings, with elevator buildings next occupying 35 percent of the space.

The borrower

The PincusCo database currently indicates that Strategic Hotels & Resorts owned at least two commercial properties in New York City with 321,136 square feet and a city-determined market value of $189 million. (Market value is typically about 50% of actual value.) The portfolio has $75 million in debt, borrowed from MetLife. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

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