Hidrock Realty has secured $66 million in construction loans for its two Fashion District hotel projects — at 960 Sixth Avenue and 25 West 37th Street — the developer announced earlier this week.
As The Real Deal previously reported, Hidrock purchased the note for 960 Sixth Avenue, also called the Atlantic Bank building, from Société Générale for $40 million in October 2009. The company foreclosed on the 35th Street office building, which by then had only one tenant, in August 2010. Previous owner Statuto Group had planned a residential conversion for the site, and Hidrock had considered a mixed-use space including offices, but in the end a hotel was the most lucrative venture, said Hidrock’s president, Abraham Hidary.
The developer now plans a Courtyard Marriott at the address, for which it just closed on $36 million in construction financing from BBVA Compass. The hotel, across the street from Macy’s Herald Square flagship, will boast 167 rooms, a rooftop bar and retail, and should be completed by October 2012. The total cost of the conversion will be around $30 million, Hidary said.
Nearby, Hidrock is developing 25 West 37th Street, also under the Marriott umbrella, with Florida-based partner Robert Finvarb Partners. Hidrock nabbed a $30 million construction loan from the Bank of Nova Scotia for the $54 million project. The 173-room hotel, set to rise between Fifth and Sixth avenues, will be a Springhill Suite and is slated for completion in October 2013. Architect Gene Kaufman is designing both hotels, Hidary said. Neither bank could be immediately reached for comment.
Hidrock purchased a controlling stake in the 37th Street parcel for $18 million in the second quarter of 2010, and later decided to develop a hotel there, Hidary said.
Hidrock is very active in the Fashion District submarket, where the company owns and operates a number of office properties. Despite the lending climate, the developer secured great terms on the London Interbank Offered Rate-based loan — less than 5 percent interest with between 55 and 60 percent leverage, according to Hidary.
“Lenders are looking for quality product in quality locations, and we fit right into that mold,” he said.