NEW YORK CITY-A fund managed by Vornado Realty Trust has participated in the recapitalization of the Crowne Plaza Times Square Hotel in a joint venture deal with property owner City Investment Fund, the company unveiled Friday morning. The REIT now holds a 38% stake in the property, and Vornado’s fund investment is subordinate to the property’s $259 million of senior debt, which matures in December 2013 with a one-year extension option.
In May 2011, Vornado agreed to acquire the $34-million most junior trache of the property’s mezzanine debt. Several months later in December, Vornado contributed $31 million and its partner chipped in $22 million to pay down third-party debt for future capital expenditures.
Under the deal, the JV plans to reposition the hotel’s 180,000 square feet of office space and 15,000 square feet retail space, as well as add additional signage. However, the total amount of the recap was not disclosed to GlobeSt.com by press time.
The 795-unit hotel, constructed in 1989, has a complex financial history. Due to maturity default, the hotel’s $141.3 million loan was transferred to special servicing in November 2011, according to data provided by Trepp. The loan was modified on Dec. 16, 2011 with a two year extension to Dec. 9, 2013.
The loan’s initial maturity date was Dec. 9, 2009, with two one-year extension options, according to a report from Fitch Ratings. In 2008, a $72-million capital improvement plan was implemented to improve the building’s guest rooms and common space. As a result, the servicer reported NOI had increased approximately 51.7% as of year-end 2010 from year-end 2009, Fitch says.
In addition, as of the December 2010 Smith Travel Research report, occupancy, ADR and RevPAR were 92.2%, $262, and $241, respectively, compared to 86.3%, $269, and $232, respectively. Furthermore, as of the December 2010 rent roll, the office and retail components were 98% leased.
Calls to Vornado and CIF were not returned to GlobeSt.com by deadline Friday.
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