A
pair of New York City-based companies secured the loan to refinance the
full-service hotel in the New York City area.

NEW YORK
CITY — A pair of New York City-based companies, an affiliate of GFI Capital
Resources Group, Inc. and Spruce Capital Partners, have secured a $112.5
million loan to refinance the 287-key Ace Hotel Brooklyn in New York City.

Walker &
Dunlop arranged the leasehold bridge loan from New York City-based Torchlight
Investors. Loan proceeds will be used to retire existing senior debt and
preferred equity, as well as to fund closing and financing costs.

Philadelphia-based
Corten Real Estate also said it has exited a preferred equity investment made
in the hotel as part of the refinance. Corten originally invested in the
property in February 2021, with funding from both a separate account it manages
and Corten Real Estate Fund I LP.

The Ace
Hotel Brooklyn offers F&B and event operations along with three fully
leased ground-floor retail spaces that are currently occupied. Additional
amenities include an event space and a ballroom, and a fitness center.

“New York is
one of the most desirable hospitality markets in the country and is positioned
for continued outsized year-over-year growth. Among the Top 25 lodging markets,
New York ranks second nationally in RevPAR growth,” said Stan Spiegelman, COO
at GFI. “The refinancing of Ace Brooklyn positions the hotel and our investors
to continue capturing the exceptional growth potential we see across New York
City. GFI’s core investment thesis for the coming years is grounded in our
conviction in the continued strength of the New York City hospitality markets,
which remain a key focus of our capital deployment.”

“New York
City remains the most supply-constrained hotel market in the country, driven by
significant regulatory barriers including the Safe Hotels Act, zoning
amendments requiring special use permits, and Local Law 18, which restricts
short-term rentals,” said Michael Brown, managing director at Walker &
Dunlop. “These factors have limited new hotel development, reduced existing
supply, while tourism demand continues to surge, with more than 64 million
visitors expected in 2025.”

“GFI’s
vision, the Ace brand, and this unique location made the deal compelling from
the outset,” said Brandon Flury, principal at Corten. “While the New York City
hospitality market has once again proven its resiliency through its post-COVID
resurgence, what ultimately made the investment successful was the alignment we
had with our partners on how best to operate and optimize the asset-level
business plan. We couldn’t be happier with the outcome and look forward to
being an accretive, strategic investor alongside GFI and other best-in-class
operating partners in the very near future.”