Madison Realty Capital (MRC) just closed a $27,000,000 first mortgage loan that will be used for the repayment of existing construction financing on the Paper Factory hotel, located at 37-06 36th Street in Long Island City, Queens, NY.
In addition, the borrower will also use the financing for the purchase and repositioning of two contiguous buildings currently operating as short-term stay hotels located at 1109-1111 Manhattan Avenue and 66-80 Clay Street in the Greenpoint section of Brooklyn.
Joshua Zegen, Co-Founder and Managing Member of MRC, made the announcement.
The borrower purchased the six-story 81,000 s/f Long Island City warehouse that served as a thriving paper factory industrial property for years in September 2012.
He spent the last year turning it into a trendy loft hotel with 122 guestrooms, retaining the location’s commonly associated Paper Factory name. The finishing touches are currently being added to the location, which is now substantially complete and expected to open later this month.
The property includes a gym, office and conference space, as well as a meeting space; the first floor offers a modern lobby, restaurant, gift shop, and computer stations.
The 1109 Manhattan Avenue property is a 4-story, 22,875 s/f hotel offering 101 rooms. 66-76 Clay Street is a 3-story, 21,000 s/f hotel with 91 rooms.
The borrower intends to pursue an aggressive renovation strategy and reposition both properties, bringing them to market with similar finishes as the Long Island City Paper Factory hotel.
“Our experience funding similar projects throughout New York City allowed us to understand this borrower’s needs, facilitate a suitable structure and close the deal, all in a relatively quick timeframe,” said Zegen.
“The outer boroughs are becoming increasingly desirable locations for lodging, particularly for tourists looking for affordable alternatives to Manhattan hotel stays. We are pleased to have provided the financing for this latest transaction and look forward to the completion of this unique hotel portfolio.”