The Real Deal New York

Cindat finances hotel portfolio buy with $335M in loans

Chinese firm acquired majority stake in seven Manhattan hotels from Hersha Hospitality Trust

May 02, 2016 02:38PM

Hampton Inn Times Square (inset: Greg Peng)

Hampton Inn Times Square (inset: Greg Peng)

Chinese investment firm Cindat Capital Management financed its $571 million purchase of a majority stake in seven Manhattan hotels with $335 million in loans from Natixis Real Estate Capital and Oaktree Capital Management.

The financing consists of a $285 million senior loan from a syndicate of domestic and international lenders led by Midtown-based Natixis, as well as a $50 million mezzanine loan from an affiliate of Los Angeles-based Oaktree.

Cindat, a U.S. subsidiary of China Cinda Asset Management, closed Monday on its previously announced acquisition of a 70 percent stake in the seven limited service hotels from Philadelphia-based Hersha Hospitality Trust.

The deal sees Hersha retain a 30 percent equity interest in the properties, as well as a $37 million preferred equity stake, at a 9 percent fixed coupon rate.

Cindat paid $526,000 per key for the properties, which hold a combined 1,087 rooms in Times Square, Chelsea, Herald Square and the Financial District operating under the Holiday Inn, Hampton Inn and Candlewood Suites brands.

“Demand for high-quality U.S. real estate assets is great from Chinese investors,” Cindat CEO Greg Peng said in a statement, adding that limited service hotels in Manhattan “offer steady cash flow with relatively low volatility, and hence, good risk-adjusted investment returns.”

Cindat recently acquired a $135 million equity stake in Bizzi & Partners Development’s planned luxury condominium tower at 565 Broome Street in Soho. The firm is also an investor in RFR Realty’s 100 East 53rd Street. — Rey Mashayekhi