InterContinental New York ownership could seek refinancing

The owners of the InterContinental New York Times Square have exercised the first of four one-year extension options on a $188 million conduit loan. The borrower is likely buying time to find suitable refinancing, Sean Barrie, a research analyst at Trepp, told Real Estate Capital.  “The financials on this deal are exemplary,” he said. “This doesn’t look like the borrower […]

The owners of the InterContinental New York Times Square have exercised the first of four one-year extension options on a $188 million conduit loan.

The borrower is likely buying time to find suitable refinancing, Sean Barrie, a research analyst at Trepp, told Real Estate Capital. 

“The financials on this deal are exemplary,” he said. “This doesn’t look like the borrower needs to work something out, like find a tenant or solidify financial performance, but that they just don’t have refinancing in their docket yet. Nothing else seems to be the cause.”

InterContinental New York Times Square Hotel
InterContinental New York Times Square Hotel

The 25-month floating rate loan — BAMLL Commercial Mortgage Securities Trust 2014-ICTS — was set to mature this month.

The transaction does not have subordinate debt, but it does include preferred equity in the amount of $177 million.

The loan went on Trepp’s watchlist in February, which is routine practice when loans approach their maturity.

The bank originated the loan in May 2014 to a consortium of limited liability corporations affiliated with Tishman Realty Corporation, city records show.

The InterContinental Hotel is a 607-room luxury hotel located at 300 West 44th Street at Eighth Avenue within the Times Square/Theatre District of Manhattan. The hotel’s total revenue dropped six percent last year, from $87.2 billion in 2014 to $82.4 billion in 2015.

At the time of issuance, Morningstar valued the property at $284.5 million using a capitalization rate of 7.80 percent, which was 43.21 percent lower than the appraised value of $501 million. The Morningstar value resulted in a loan-to-value (LTV) ratio of 66.09 percent for the first mortgage loan.

A Tishman affiliate purchased the property for $116.5 million from Harwood Properties in July 2007. The company did not respond to requests for comment.

 

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