Ares Supplies Financing for $40M Acquisition of Westchester Marriott
By Andrew Coen March 11, 2022 6:00 am
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Taconic Capital Advisors and HEI Hotel & Resorts have teamed up on a joint venture that secured a financing package for the $40 million acquisition and $30 million renovation of the Westchester Marriott hotel in Tarrytown, N.Y., Commercial Observer can first report.
Ares Commercial Real Estate Corporation sold the 444-key hotel to the joint venture while also providing financing for both the purchase and renovation plans. The exact loan amount was not released.
“We are very pleased to enter into this agreement in support of Taconic’s and HEI’s business plans for the Westchester Marriott,” Bryan Donohoe, CEO of ACRE, said in a statement. “We believe the collaboration of Taconic and HEI and their demonstrated capabilities will enable the property to thrive in the evolving Westchester market.”
Under the partnership, HEI Hotels & Resorts will take over management of the property from Marriott. The hotel will still maintain the Marriott name.
Steen Petri, senior vice president, investments, at HEI, noted that the property has great potential given that the Westchester County market has lost nearly 1,200 directly competitive hotel rooms during the last several years including more than 90,000 square feet of meeting space. Two of the area’s biggest recent hotel closings included the Westchester Hilton in Rye Brook in July 2020 and the Renaissance Westchester Hotel in West Harrison last year.
“A lot of markets pre-COVID were dealing with an influx of new supply but here you have the opposite,” Petri told CO. “It is certainly an attractive dynamic if you are going to invest in a full-service hotel to be the last one standing.”
Located at 670 White Plains Road, the 15-acre property offers 21 event rooms comprising 26,700 square feet of conference and meeting space including a 9,000-square foot ballroom with a total capacity of 1,100 people. The hotel also includes a Ruth’s Chris Steak House, Cooper Mill American restaurant, a gift shop, fitness center, spa and laundry room.
“The Westchester Marriott provides a unique opportunity in a time of continued and permanent market supply reduction,” Andrew Lam, director with Taconic, said in a statement. “A property of this caliber, with a transformative renovation and new best-in-class management, is positioned to excel.”
The deal marks Taconic’s first acquisition with HEI and the company’s 12th hotel transaction. Its portfolio from the past year alone encompasses 17 properties and 3,700 keys.
HEI Hotels & Resorts has a portfolio of more than 90 hospitality properties in the U.S. The company targets institutional hotel assets in major urban, suburban and resort locations.
”I anticipate that this will be the first of many joint venture acquisitions between HEI and Taconic,” Petri said. “Our DNA is real estate investment in hotels.”
Andrew Coen can be reached at acoen@commercialobserver.com.
