MRECS Provides $199M Refi for Hudson Yards Hotel
- Aug 20, 2019
An affiliate of Mack Real Estate Credit Strategies has provided a $199 million loan to refinance the Courtyard by Marriott Hudson Yards hotel. Companies affiliated with hotelier David Marx are developing the property, which is approaching completion in the Hudson Yards neighborhood.
The financing proceeds will go toward taking out a construction loan and other previous financing, including a $66 million EB-5 component, ahead of the hotel’s opening, which is scheduled for later this month. MRECS had also provided a 24-month, $88 million construction loan for the same property in June 2018, a spokesperson told Commercial Property Executive.
The 29-story, 399-key Courtyard by Marriott Hudson Yards will feature a restaurant, meeting space, a fitness center and ground-floor retail space, which will be occupied by a Chase Bank branch.
Located at 461 W. 34th St., at the corner of 10th Avenue, the hotel is well-suited to benefit from the wave of development in Hudson Yards. Related Cos. is developing about 8.5 million square feet of office space, 1 million square feet of retail, and 2 million square feet of residential at the site. The property will have a direct connection to the 34th Street–Hudson Yards subway station, the neighborhood’s primary public transportation hub.
Additional development in the Hudson Yards neighborhood includes Brookfield’s Manhattan West, with 7 million square feet and Tishman Speyer’s The Spiral building, with 2.8 million square feet. The hotel is also close to the Javits Center, which recently underwent a $463 million renovation and expansion.
Too many hotels?
The first phase of Hudson Yards officially opened in March, with the debut of Shops & Restaurants, a 1 million-square-foot retail center that also features multiple dining venues. Activity at the 28-acre project has been ongoing. In June, German insurer Allianz paid $384 million for a 49 percent share in 30 Hudson Yards, a 1.4-million-square-foot office tower that, at 1,296 feet, is the city’s second-tallest office tower.
And all the action within Hudson Yards itself is heating up the surrounding area. Less than two weeks ago, Cove Property Group scored a lease that brought its Hudson Commons to 65 percent leased. The former Emblem Health warehouse at 441 Ninth Ave. has been redeveloped, repurposed and expanded vertically into a 25-story creative office building.
Its promising location notwithstanding, the Courtyard by Marriott Hudson Yards comes onto the market at a challenging time. RevPAR declined to the lowest first-quarter average since 2011, as ADR fell across all Manhattan lodging submarkets, according to a report from PwC. Deliveries have outpaced demand growth, driving first-quarter RevPAR down by 7.7 percent from the prior year.