Gail Kalinoski, Contributing Editor | Commercial Property Executive
Plans to convert the historic 5 Beekman St. in Lower Manhattan, one of the oldest high-rise buildings in New York City, into a luxury lifestyle hotel with an adjoining condominium tower are moving forward now that the property owners and their joint venture partner have secured $350 million in financing.
The financing consists of debt and equity, including a $195 million construction loan made by a syndicate led by HSBC and M&T Bank. About $150 million is capital from GFI Capital Resources Group and Elliott Management Corp., a multi-billion hedge fund. GFI Development Co. and GB Lodging, affiliates of GFI Capital Resources Group, have formed a joint venture with Elliott Management to convert the 165,000-square-foot, 10-story building into a hotel with 287 rooms, and construct an adjacent condominium tower with 68 residences.
The Beekman Hotel at 5 Beekman St. will be operated by Thompson Hotels. The 46-story condo tower will be built on an adjacent lot at 115 Nassau St. The hotel is scheduled to be finished in the third quarter of 2015, followed by the completion of the residential tower. Sales for The Beekman Residences are expected to start in the fall.
“The Beekman is one of the most exciting developments in New York City and will be a cornerstone of Lower Manhattan’s new downtown,” Allen Gross, CEO of GFI Development and co-founder of GB Lodging, said in a news release.
Once completed, the project will total approximately 340,000 square feet and continue to redefine Lower Manhattan and the neighborhood surrounding the World Trade Center, South Street Seaport, City Hall Park and the Brooklyn Bridge.
“Elliott is pleased to be part of the revitalization of this historically prominent section of New York City,” Tim Mackey, portfolio manager at Elliott Management, said in the release. “GFI Development and GB Lodging are each staffed with top-notch and dedicated professionals committed to the successful renovation, development and integration of the project into the fabric of Lower Manhattan.”
The red brick and terra cotta office building was constructed in 1883. Used mainly by lawyers, it was known for years as the Temple Court Building and Annex, according to the New York Landmarks Conservancy. The building, now vacant, was designated a New York City landmark in 1998. Its main feature is an atrium topped by a large skylight, the Landmarks Conservancy noted. The atrium and skylight were covered up in the 1940s for safety reasons but the walls hiding them from view have since been removed.
“We are privileged to restore the grandeur of 5 Beekman St. to become one of the great, iconic hotels in New York City,” Bruce Blum, president & co-founder of GB Lodging, said in the release.
The New York Times reported that the Chetrit Group and Bonjour Capital had bought 5 Beekman St. in 2008, also intending to turn it into a hotel before those plans fell through. Four years later, GFI Capital paid $64 million for the historic building and $22 million for the vacant lot, according to NYT.
Since 2007, GFI Development has completed more than $1 billion of residential, office, retail and hospitality real estate, including The Ace Hotel New York and The NoMad Hotel, both in Manhattan. It is currently developing $750 million of residential, commercial and hospitality projects. GB Lodging is a hotel investment, development and asset management firm focused on the lifestyle segment of the hospitality industry. Led by Gross and Blum, the executive team has completed more than $4 billion of hotel transactions. Elliott Management was founded in 1977 and has more than $24 billion in assets under management. The firm has invested more than $3 billion in commercial real estate since 2009.
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