Marriott International Inc.’s luxury Edition brand will open a second location in New York, at a property in the Times Square area owned by a partnership that also agreed to refinance the debt on the project.
Marriott will operate the 452-room boutique hotel to be built at 701 Seventh Ave., according to a statement yesterday by Winthrop Realty Trust (FUR), a Boston-based real estate investment company that’s part of the ownership group. Winthrop in 2012 bought the site, at the corner of 47th Street in one of Manhattan’s most popular tourist areas, in partnership with New York-based Witkoff Group and New Valley LLC.
Marriott, based in Bethesda, Maryland, has been developing the Edition brand with hotelier Ian Schrager. The company in August said it planned to sell its first Manhattan Edition, under development at the Clock Tower building near Madison Square Park and expected to open in 2015.
“New York is one of the most important destinations in the world, and we are delighted to have secured yet another iconic Manhattan location for our second Edition hotel in the city,” Arne Sorenson, Marriott’s president and chief executive officer, said in a statement today.
The refinancing agreement on the Times Square site includes a new $237.5 million mortgage and $315 million mezzanine loan, according to yesterday’s statement. Winthrop contributed an additional $32.5 million of equity to the deal, bringing its capital contributions to $85.9 million, the company said.
In case of a loan default, Marriott agreed to purchase the hotel portion of the property for $314.6 million during the first two years after opening, Winthrop said.
Barry Sternlicht’s Starwood Property Trust Inc. (STWD), based in Greenwich, Connecticut, and iStar Financial Inc. provided a $815 million construction loan for the project, according to today’s statement from Marriott and Witkoff Group. Starwood Property Trust and Starwood Capital Group Global LLC also have an equity interest in the transaction.
The new Edition hotel will have 30,000 square feet (2,800 square meters) of food, beverage and entertainment space and construction is expected to be completed in 2017, Winthrop said.
Marriott last week said it sold its London Edition, which opened in September. The total purchase price for that property, the Manhattan Clock Tower and a project in Miami Beach is expected to be about $815 million, according to the company.
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