Vornado Realty Trust said it helped to recapitalize the Crowne Plaza Hotel in Times Square under a joint venture between the property owners and one of its real estate funds.
Vornado, based in Paramus, N.J., said it will manage and lease the 180,000-square-foot commercial space at the 795-room property, located at 1605 Broadway and 48th Street, while the partner of its real estate fund will asset manage the hotel.
Vornado said it initiated the deal in May 2011 by acquiring the most junior piece of the property’s mezzanine debt, a $34 million note. By December 2011, Vornado contributed $32 million and its partner contributed $22 million to the property to pay down debt to a third party, and fund additional capital expenditures.
The funds were contributed as debt, which is convertible into preferred equity at the property. Vornado said it now has a 38 percent stake in the property, but that amount is subordinate to $259 million in senior debt, which is due in December 2013, with the option for a one-year extension.
The property, owned by City Investment Fund, includes 15,000 square feet of prime retail space, nine large billboard options for advertisers, a 159-space parking garage and a health club.
Occupancies and rates at the hotel fell sharply following the 2008 economic downturn, despite a $70 million renovation.
A $151.8 million loan backed by the Crowne Plaza was transferred to a special servicer, Bloomberg News reported in November.
Thomas Lydon, president of the City Investment Fund, declined to comment, referring inquiries to Vornado. Vornado officials were not immediately available for comment.