Knighthead Funding Refis Montauk Resort With $65M Loan

A beachfront hotel in Montauk, N.Y., has reeled in some fresh capital four years after the Eastern Long Island hospitality property was acquired.

Knighthead Funding supplied a $65 million loan to refinance the 65-key Marram Montauk on the eastern edge of the Hamptons in an area known for its surf fishing, Commercial Observer has learned.

Greenwich, Conn-based Knighthead did not reveal the name of the borrower, but KSL Capital Partners acquired the Eastern Long Island resort for $78.5 million from Bridgeton Holdings in May 2022 and still owns it. Bridgeton acquired the 1967-built seatside hotel for $32 million in 2018 and repositioned the site into a luxury resort, The Real Deal previously reported. 

Located at 21 Oceanview Terrace, five miles west of the Montauk Point Lighthouse, the 1967-built seaside hotel has amenities that include direct beach access, a heated pool, private cabanas and wellness programs. The hotel has seen more value-add investments since its previous 2020 renovations by adding cabanas and creating meeting spaces from underutilized storage areas, upgrades that boosted revenue from increased event bookings, according to Knighthead. 

“In Marram Montauk, Knighthead identified an attractive opportunity to finance an irreplaceable oceanfront resort in a supply-constrained lodging market, with beach frontage and extremely high barriers to entry,” Jonathan Daniel, principal of Knighthead Funding, said in a statement. 

KSL Capital Partners did not immediately return a request for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.