HRC Provides Mezzanine Loan for Le Meridien Conversion
FEBRUARY 21, 2008. Hudson Realty Capital LLC (HRC) recently provided a $3.4 million mezzanine loan for the development of a 202-room Le Meridien Hotel. The property, a now-vacant YMCA building, is located in Philadelphia's historic Broad Street District.
"HRC was also involved in the first stage of this project, having provided a $10.88 million acquisition and predevelopment loan, which was recently retired," explained Spencer Garfield, managing director of HRC, a New York-based real estate fund manager. "The smaller mezzanine loan is an accommodation to the sponsor to help fill a gap in financing."
The hotel is to be constructed on the top five floors of the turn-of-the-century, 10-story building, plus approximately 5,500 square feet on the ground level to include the hotel lobby and a 50-seat bar. The plans also call for a 90-seat restaurant and a 3,000 square-foot ballroom on the third floor.
Construction is expected to be completed in 16 months, and the hotel is scheduled to open in Spring 2009. It will be the first new upscale, full-service hotel to open in Center City since 2000.
The sponsor, Development Services Group (DSG), is based in Memphis, Tenn., and has a twenty-year track record for developing and operating quality real estate assets including hotel, residential multi-family and healthcare properties. The firm has developed approximately 2,600 rooms in 23 hotels in the U.S. and currently manages nine hotels totaling more than 1,000 rooms.
Since the formation of its initial two funds in 2002, HRC has closed more than $2 billion in commercial real estate transactions and more than $1.2 billion of assets under management.
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