GFI Capital Takes $153M Loan From Apollo for Carlton Hotel Buy


Apollo Commercial Real Estate Finance lent $153.5 million to GFI Capital Resources Group for its purchase and upcoming redevelopment of the Carlton Hotel in Manhattan’s NoMad neighborhood, according to city records made public today.

Allen Gross’ real estate investment firm purchased the 317-room hotel located at 88 Madison Avenue between East 28th and East 29th Streets from the New York-based real estate development firm Wolfson Group for $162 million. The acquisition and financing both closed on Sept. 30.

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The floating-rate loan carries a three-year initial term, with two one-year extension options, and is split into a $138.4 million first mortgage loan and a $15.1 million mezzanine loan, according to an earlier press release from Apollo. That release, from Oct. 1, did not name the hotel.

“The whole loan has a loan-to-value of 52 percent and has been underwritten to generate an internal rate of return of approximately 8 percent on an unlevered basis,” the release states.

The first mortgage financing includes a senior mortgage of $94 million, a building mortgage of $23 million and a project mortgage of $22.4 million, the loan documents filed with the city show.

The debt includes the consolidation of a $100 million loan that Column Financial provided against the 12-story hotel in 2006. The previous mortgage has an unpaid principal balance of $92.4 million, according to the loan documents.

The Beaux-Arts style property, originally built as the Hotel Seville in 1904, sits within walking distance of the Empire State Building. The Carlton, which is part of Marriott International‘s hotel portfolio, features a Tiffany-style glass skylight and a two-story waterfall in the lobby. A standard room at the hotel costs about $240 per night, according to its website.

The specifics of the property’s redevelopment were not disclosed at the time of publication. Representatives for Apollo and GFI Capital declined to comment.

Earlier this month, Commercial Observer reported that GFI Capital took a $100 million loan from American International Group’s AIG Investments on the Ace Hotel at 1186 Broadway and an adjacent apartment building at 14 West 29th Street.