Pembrook Capital Management has provided a $25.8 million mezzanine loan to the McSam Hotel Group. The loan bears a 12-month maturity, has a first mortgage conversion feature and will be used to facilitate a partner buyout and predevelopment, Real Estate Capital sister publication Private Debt Investor reported.
The funds are secured by a block development site with frontage on 38 th and 39 th Streets, on the east side of Ninth Avenue in Manhattan. Demolition of existing structures at the site is underway and McSam plans to begin construction of a 506-room Hyatt Place Hotel, scheduled for completion in 2017.
“In the current financing environment, it can be challenging for borrowers to secure funding for non-cash flowing assets like development sites, regardless of their location and value, so it’s gratifying to be able to execute this deal,” said Pembrook CEO Stuart Boesky in a statement.
Pembrook invests in and originates US real estate debt through first mortgages, mezzanine and bridge loans, note financings and preferred financings. Pembrook invests in most commercial real estate property categories and recently raised $100 million on its third commercial real estate debt fund. Since its founding in 2006, the New York based company has originated or participated in 85 investments totaling over $950 million.
Other recent investments included a $32 million first mortgage loan for the acquisition and renovation of a student housing complex in Los Angeles near the University of Southern California (USC) campus; a $30.4 million first mortgage bridge loan and preferred equity position for acquisition and renovation of the Madison Oaks Apartments complex in the Tampa, Florida area; and a $20 million first mortgage loan for the purchase of 468 Columbus Avenue, a property on the Upper West Side ofManhattan being redeveloped into residential and retail space.