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Rotem Rosen’s MRR hits $73M target in bond issue for Lower East Side hotel buy
Funds will finance the purchase of Hotel Indigo
Rotem Rosen’s MRR Development raised $73 million on the Israeli bond market on Monday.
This is MRR’s first foray on the Israeli market, and the funds from the institutional bond offering are intended to finance the $162.5 million purchase of the 294-key Hotel Indigo on the Lower East Side.
Demand for the bond, which is secured by a senior position on the hotel, exceeded the target of $72 million. The final deal carries an interest rate of 4.5 percent. The tender was oversubscribed, with a demand of $122 million.
Other companies have also used secured bonds to finance their projects, including Joel Gluck’s Spencer Equity, which raised $118 million in June to refinance a rental tower at 436 Albee Square in Downtown Brooklyn.
Rosen went into contract in June to buy the the hotel at 171 Ludlow Street from Brack Capital and InterContinental Hotels, which has a 20-year management deal for the property. Rosen and his partners, Indian auto mogul Anand Mahindra and banking executive Jerry Rotonda, launched MRR Development earlier this year. The hotel is their first asset.
Discount Bank advised MRR on the deal.
Rosen was not immediately available for comment.