ARTIC Refinances 3 Luxury Hotels for $503M

The Qatari investor engaged HFF to source separate loans for the properties in New York, Miami and Washington, D.C. Mack Real Estate Credit Strategies was the lender on each deal.
The Manhattan at Times Square Hotel
The Manhattan at Times Square Hotel

Qatar-based Al Rayyan Tourism Investment Co. (ARTIC) has refinanced three of its luxury hotels for a total of $503 million, according to HFF, which arranged all three loans. The hotels, which total 1,049 guestrooms, are The Manhattan at Times Square Hotel; the St. Regis Bal Harbour Resort, in Miami; and the St. Regis Washington, D.C.

The three floating-rate loans were placed with Mack Real Estate Credit Strategies: a $290 million loan for The Manhattan at Times Square Hotel, a $132 million loan for the St. Regis Bal Harbour Resort and an $81 million loan for the St. Regis Washington, D.C. Each carries a four-year term with a one-year extension.

St. Regis Bal Harbour Resort
St. Regis Bal Harbour Resort

Completed in 1952, the 22-story Manhattan at Times Square Hotel has 685 guestrooms and 9,100 square feet of retail. The hotel, at 790 7th Ave., covers the entire city block from 51st to 52nd Street and 7th Avenue to Broadway. ARTIC is finalizing plans to redevelop the property as a mixed-use tower, with 134,000 square feet of retail, 250 hotel guestrooms and 150 luxury condominium residences. 

The St. Regis Bal Harbour is a 27-story luxury hotel with 192 guestrooms and 24 condo-hotel units. It features a spa, two beach and oceanfront pools, a fitness suite, a business center, 11,200 square feet of meeting space, a 7,800-square-foot ballroom, and multiple food and beverage outlets. The property is on the northern point of Miami Beach at 96th Street and Collins Avenue, across the street from the Shops at Bal Harbour. It was acquired by ARTIC in 2014.

St. Regis Washington, D.C.
St. Regis Washington, D.C.

The 172-key St. Regis Washington, D.C. was originally built in 1926 as the Carlton Hotel and is listed on the National Register of Historic Places. It features 25 suites with butler service and complimentary house car, 11,200 square feet of meeting space, a business center, afternoon tea, a 24-hour fitness center, bicycle rental and the St. Regis Bar and the Alhambra Restaurant. It’s at K Street NW and 16th Street NW, less than two blocks from the White House and within minutes of multiple Washington sights. ARTIC acquired the property in mid-2015.

The HFF debt placement team representing ARTIC consisted of Daniel Peek, senior managing director & head of HFF’s hotel group; Managing Directors Danny Kaufman and Christopher Peck;  Senior Directors Jeff Bucaro, Scott Wadler and Chris Hew; and Associate Nicole Aguiar.

A changed market 

Over the past 10 to 15 years, demand at U.S. hotels has flipped from being higher during the week (from business travel for the most part) to being higher on the weekends (primarily from leisure travelers), according to a 2018 U.S. hotel market outlook by CBRE. Nationwide average daily revenues in 2016 were $120.87 on weekends, versus $118.54 on weekdays.

A big slice of the increase in leisure travel has been driven by growth in spending by senior citizens. While the role of international travelers is harder to parse, recent CBRE research reportedly found that international travel accounts for about half of the total guestroom-nights sold in Miami and in New York, with all other U.S. cities lagging well behind in this regard.

Images courtesy of HFF