The Renwick Hotel has arisen after its new owner reportedly scored a “substantial discount” to acquire the property.
Capstone Equities reopened the hotel at 118 East 40th Street last month, the Commercial Observer reported. The hotel is operated by the private equity firm’s hospitality management arm, Rebel Hospitality.
The reopening caps off a challenging couple of years for the property. Meadow Partners, the previous owner, defaulted on a $46 million mortgage in April 2020 as the pandemic decimated the hotel industry. By November of that year, it appeared the hotel would be converted into a homeless shelter, although that never happened.
While the hotel was shuttered in the wake of the pandemic, Capstone made its move. It purchased the defaulted note from Heitman Capital Management in January for an undisclosed price, though reportedly scored a discount. Maxim Capital Group provided a $15.5 million loan for the note purchase.
Meadow played ball with the changes, agreeing to a “friendly deed-in-lieu” to hand Capstone ownership. The firm was then able to reopen the property, a landmarked building constructed almost a century ago.
Meadow signed a 99-year lease for the then-Bedford Hotel in 2014, paying $22 million in cash upfront for the 16-story property. Meadow planned to spend $15 million in a phased rehabilitation of the 135-room hotel, which represented the first hospitality deal for the company.
Capstone has experience with iconic New York hotel properties. In 2018, it partnered with Highgate on a $190 million purchase of 541 Lexington Avenue in Midtown East, then known as the W Hotel. Sources told The Real Deal at the time the partners received $130 million in financing to close on the purchase.
Hotels have slowly been reopening in the city, some due to the severance law requiring hotels to pay for employees kept on the sidelines. In March, the iconic Hotel Chelsea began taking bookings across two floors, despite ongoing renovations. A property representative told the New York Post the goal was to fully reopen late in the summer.
[CO] — Holden Walter-Warner