Cipriani may have refi savior in King Street Capital

Hedge fund in talks over $150M of operating debt

Cipriani CEO Giuseppe Cipriani and Casa Cipriani New York (Getty Images, Cipriani/Photo Illustration by Steven Dilakian for The Real Deal)
Cipriani CEO Giuseppe Cipriani and Casa Cipriani New York (Getty Images, Cipriani/Photo Illustration by Steven Dilakian for The Real Deal)

The next Cipriani bash will likely have a seat reserved for a “King.”

Hedge fund King Street Capital is in advanced talks to refinance nearly $150 million of operating debt for the Italian hospitality company’s U.S. subsidiary, people familiar with the matter told the Wall Street Journal. The capital would be enough to retire 2018 loans from Ares Capital.

King Street would also provide additional funding to help Cipriani grow its brand nationwide.

Cipriani has struggled in recent years as pandemic lockdowns hit restaurant and event space businesses hard. The company suffered another blow around the holidays, when a nationwide surge in coronavirus cases scuttled plans for lucrative holiday parties.

Two Cipriani locations in New York City are in danger of foreclosure. Cipriani has been in default on $53 million in mortgage debt since May 2020, backed by the locations at 110 East 42nd Street and 55 Wall Street. The debt was transferred to a special servicer that year and draft foreclosure documents have been prepared.

The since-lapsed moratorium on commercial evictions and foreclosures spared those Cipriani locations for a long while, though. The company is still working to restructure the debt, according to the Journal.

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Cipriani’s other properties are already showing signs of progress as the company emerges from its pandemic backpedals.

The ownership trio of Midtown Equities, Centaur Properties and Cipriani S.A. last month scored a $100 million refinancing from Acore Capital for Casa Cipriani in Lower Manhattan. The luxury hotel and members club includes a private club, restaurant and 15,000-square-foot spa, along with 47 hotel rooms and suites.

The company in April launched Cipriani Residences Miami. Mast Capital teamed p with Cipriani on the 80-story, 397-unit luxury condo tower in Miami’s Brickell neighborhood. Prices start at $1.1 million and units range from 1,213 square feet to 3,495 square feet.

Parent company Cipriani S.A. has plans to open 20 properties around the world in the next three years, including another Casa Cipriani in Milan this summer.

[WSJ] — Holden Walter-Warner