Natixis, Oaktree provide $335m on Manhattan hotel portfolio

The lenders provided the financing for Cindat Capital Management Limited's acquisition of a majority stake in seven Manhattan hotel properties.

Natixis Real Estate Capital and Oaktree Real Estate Finance have provided $335 million in financing for Cindat Capital Management Limited’s acquisition of a majority stake in seven Manhattan hotel properties.

Holiday Inn Express Times Square, New York
Holiday Inn Express Times Square, New York

The total purchase price was $571.4 million, including closing and capital improvement costs. Cindat is now the senior preferred joint venture partner holding a 70 percent ownership stake, while Hersha Hospitality Trust, the previous majority owner, retains 30 percent and a $37 million preferred equity interest.

The lenders provided two three-year, floating rate loans to the joint venture between Cindat Capital Management Limited and Hersha Hospitality Trust. Natixis provided $285 million of senior financing, while an affiliate of Oaktree Real Estate Finance provided $50 million of mezzanine financing to the venture.

Ashish Parikh, CFO at Hersha, told Real Estate Capital that the deal was attractive because the trust didn’t want to sell 100 percent of its interest in the properties. “We’re still a believer in New York, but we did want to diversify our income stream,” he said.

Rodrigo Real, investments director at Cindat, added: “We closed the transaction under tightening market conditions, which is a testament to the strength of the new partnership.”

The hotels are located in Times Square, Midtown West, and Lower Manhattan and totaling 1,087 rooms. The portfolio includes the Holiday Inn Express Times Square, the Candlewood Suites Times Square, the Hampton Inn Times Square, the Hampton Inn Chelsea, the Hampton Inn Herald Square, the Holiday Inn Wall Street and the Holiday Inn Express Wall Street.

At the end of March, Natixis also provided a $101 million in financing on a 21-floor commercial condominium at 17 Battery Place in the Financial District of Lower Manhattan. Then in April, Natixis provided a $65 million first mortgage financing on the Marriott Monterey Hotel in Monterey, California, as Real Estate Capital first reported.

Natixis Real Estate Capital is a full-service, direct commercial real estate lender, specializing in CMBS originations and floating-rate structures for opportunistic property acquisition and repositioning situations. Cindat is a Chinese-based investment management platform and has invested in more than $6 billion worth of real estate assets in the US, UK, Australia, and China since 2013. Hersha Hospitality Trust is a real estate investment trust that owns and operates 56 upscale hotels in New York, Boston, and Philadelphia, Washington, DC, Miami and on the West Coast.

Oaktree has $97 billion in assets under management as of March 2016, according to its website. A spokesperson for Natixis declined to comment.