The Real Deal New York

Hersha and Cindat close $385M loan for Manhattan hotel portfolio

Loan covers Midtown and Lower Manhattan hotels
By Christian Bautista | February 12, 2018 05:00PM

Jay Shah and the Holiday Inn Express in Times Square (Credit: Hersha and Holiday Inn)

Hersha Hospitality Trust and Cindat Capital Management secured a $385 million loan from UBS and China Merchants Bank for its portfolio of seven hotels in Manhattan, according to documents filed with the Securities and Exchange Commission.

The properties covered in the transaction include the Holiday Inn Express Times Square at 343 West 39th Street, Candlewood Suites Times Square at 339 West 39th Street, Hampton Inn Times Square at 337 West 39th Street, the Hampton Inn Chelsea at 108 West 24th Street, Hampton Inn Herald Square at 59 West 35th Street, Holiday Inn Wall Street at 51 Nassau Street and the Holiday Inn Express at 126 Water Street. Together, they have 1,087 hotel rooms.

The package is composed of a $300 million floating-rate mortgage and an $85 million mezzanine loan. Both components have a term of 36 months and are subject to two 12-month extensions. The deal has not yet hit property records.

The previous lender was French bank Natixis, records show.

Through this refinancing we have lowered the weighted average cost of borrowing, increased the duration of our debt and entered into a capital structure that provides the joint venture significantly more financial flexibility going forward. In addition, we have also successfully redeemed all of our preferred equity in the joint venture, providing Hersha with additional capital to pursue other opportunities in our existing portfolio,” Hersha CEO Jay Shah said in a statement.

Hersha and China-based Cindat formed a joint venture for the portfolio in 2016. Cindat paid $571.4 million for a 70 percent stake in the package, with Hersha retaining a 30 percent stake. The firm, which is backed by China Cinda Asset Management and Taikang Life Insurance, also owns 565 Broome Street, 5 Beekman Street and 125 Greenwich Street.