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Happy Hour: Sharif El-Gamal secures $270M in financing for Margaritaville site
The deal clears the distressed note held by Eli Cohen, Soho Properties boss says
UPDATED, Feb. 26, 11:18 a.m: Sharif El-Gamal has finally landed a construction loan for his Margaritaville hotel development in Times Square. The financing allows him to pay the investor who held the distressed note and complete construction of the ambitious project.
“On Friday, through the blessing of God, we got a $270 million loan,” said El-Gamal, who is co-developing the site with brothers Chip and Andrew Weiss. “It’s a real case study in the intricacies of high-stakes real estate in New York.”
The loan is backed by senior lenders Related Fund Management (the debt arm of Related Companies) and investment firm Angelo Gordon, as well as mezzanine lender, South Korea-based Hana Financial Investment. A source said the senior lenders provided $180 million in debt.
The project, a 234-key, 170,000-square-foot Margaritaville hotel at 560 Seventh Avenue, is expected to open at the end of 2020, and will top out at 30 stories. Musician Jimmy Buffett’s hotel chain agreed to sign on as building manager in April, and is also leasing the retail space.
El-Gamal’s firm Soho Properties and partner MHP Properties purchased the site in 2014 using a $63 million loan from Colony Capital. The partners planned to build a 29-story mixed-use building anchored by a Dream Hotel, with a total value of $300 million.
But after the joint venture defaulted on the loan when it matured, investor Eli Cohen bought the distressed note in May 2017 and had the option to foreclose on the site. El-Gamal said the construction loan from Related and Angelo Gordon retired Cohen’s $85 million debt in the project.
MHP did not respond to a request for comment. Related and Angelo Gordon declined to comment.
El-Gamal said the project’s foundations were completed in January.
Update: This story has been updated to include the names of the co-developers, Chip and Andrew Weiss, and to correct the name of the South Korean mezzanine lender. It is Hana Financial Investment, not Hana Bank.