Square Mile Capital Management has provided a $24.5m mezzanine loan to McSam Hotel Group for the construction of a hotel near the up-and-coming Hudson Yards development on Manhattan’s west side.
The mezzanine loan is part of $108m in financing backing the development, the balance of which is a senior construction loan from Bank of the Ozarks.
McSam, led by hotel development mogul Sam Chang, purchased the existing seven-story, 58,000 sq ft parking garage at 346-354 West 40th Street for $26.25m early last year, with plans to redevelop the property into a boutique hotel.
Well known for his extensive development of budget hotels, Chang has played an important role in New York’s hospitality industry, offering limited-service hotels that are a contrast to the city’s luxury offerings.
Square Mile managing principal Craig Solomon said: “We’re pleased to have the opportunity to assist McSam Hotel Group in this development. Our growing lending business aims to provide competitively priced financing solutions to best-in-class owner-developers and is a perfect complement to our opportunistic investment platform.”