By Al Barbarino
Real estate private equity firm PCCP, LLC has dished out a $65 million loan to the buyer of Midtown’s four-star Cassa Hotel.
HNA Property Holding Group, a Chinese corporation, purchased the 45-story tower at 70 West 45th Street after the developer, Waterscape Resorts LLC, fell into financial trouble last year.
PCCP’s loan is secured by the lower 24 stories and basement levels of the building that make up hotel and retail portions of the tower. Floors 25 through 45 are reserved for condo units and are not collateral for the loan.
“This investment gives PCCP the opportunity to originate a loan at an attractive basis on a newly constructed luxury hotel in a market with strong fundamentals,” said Rob Cohen, senior vice president at PCCP, in a statement.
Kevin Chin, vice president at PCCP, added, “The property has an ideal Midtown Manhattan location that is approximate to a wide range of demand drivers including Times Square, Rockefeller Center, luxury shopping on Fifth Avenue and the Midtown office market, and we expect the property will benefit from the opening of the BLT restaurant and improved management by an experienced operator.”
The Cassa Hotel includes 165 hotel rooms, 11,000 s/f of retail — currently leased to BLT Restaurant and slated to open in early 2012 — as well as 2,000 s/f of lounge and outdoor terrace space and 1,100 s/f of meeting space.
Waterscape completed the project in August 2010, but efforts to sell condominiums were hampered when the developer defaulted on payment obligations under its loan agreements and filed for bankruptcy protection.
HNA, a subsidiary of Hainan Airlines Group, is among a group of Chinese investors looking to expand into major U.S. cities after commercial property prices dropped significantly during the financial downturn.
The corporation paid a reported $126 million for the property, though the deed was not yet filed with the city’s finance department as of Friday afternoon.
*this article appeared in the Feb. 15, 2012 print edition of Real Estate Weekly
