Lightstone has locked up fresh financing for its Williamsburg hotel, one of two Moxy brand projects the developer has in New York City.
Lightstone secured the $77 million construction loan from G4 Capital Partners in a deal that closed Thursday, sources told The Real Deal.
The 216-room hotel at 353-361 Bedford Avenue will be Lightstone’s fifth hotel with Moxy, a Marriott International brand, and its only one in Brooklyn.
Moxy caters to a younger demographic of travelers, offering guests small rooms of about 200 square feet for less than $200 per night and access to highly activated common areas. At the Williamsburg location, those spaces will include a rooftop terrace and bar as well as a ground-floor lounge, lobby bar and cafe.
Other amenities will include co-working spaces, a fitness center and a touchless kiosk check-in, according to Mitchell Hochberg, Lightstone’s president.
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Lightstone paid $30.4 million for the development site in July 2019 with a $16 million acquisition loan from Mexican bank Banco Inbursa, according to a filing with the U.S. Securities and Exchange Commission. The loan had a one-year term with two six-month options to extend the maturity date. The entire lump sum was due on maturity, with the developer paying monthly interest payments at a rate of 4.5 percent.
Lightstone first announced the Williamsburg hotel, along with a second Moxy project on the Lower East Side, in March. Last month, the developer sewed up $130 million in construction financing for the 303-room LES property from MSD Partners and Lionheart Strategic Management. Lightstone already has three other Moxy hotels: in Times Square, Chelsea and the East Village.
Both projects are coming on the heels of more than 200 New York City hotels shutting down during the pandemic. Hotel occupancy is not expected to approach a normal level of roughly 86 percent until 2025, according to a June report.
One Moxy hotel that opened in 2018 in the Financial District has had a rough go. Developer Mark Gordon’s Tribeca Associates handed the property over to a lender in May.But Hochberg is not worried, citing the time-old real estate principal of location as the primary rationale for why the Bedford Avenue hotel will work.
“[The hotel] is located just over the Williamsburg Bridge, in the heart of Brooklyn’s vibrant nightlife, restaurant and bar scene, situated in rapidly growing Williamsburg,” he said in a statement.
Lender G4 echoed the sentiment.
“We are firm believers in New York and we are confident that we are seeing a near-term return to the leisure travel market,” said G4’s Robyn Sorid, who led the transaction with co-managing partner Jason Behfarin and senior managing director Robert Palumbo.
The 11-story hotel just topped out and is expected to open in late 2022, according to Hochberg.