International developer IFA Hotels and Resorts (IFA HR) announced that the consortium comprising IFA HR, Kuwait Real Estate Company (KREC) and United Investments Portugal (UIP) has simultaneously closed a financing and acquisition deal valued at $315 million for its YOTEL New York property.
“This is the second funding transaction we have closed in the last six months. Securing these deals – both with foreign lenders – goes to show that despite tough market conditions, the right project in the right location with the right sponsor will attract the necessary capital,” Talal Jassim Al-Bahar, Vice Chairman and CEO of IFA HR, said.
The financing for YOTEL, worth $240 million, was led by Atrium Holding Company, a private investment vehicle based in the United States, with co-funding by Centerbridge Partners, L.P., an investment firm. The acquisition of the property from Related Company, the overall project developer, happened simultaneously with the financing, bringing the total value of the transaction to $315 million.
The deal marks the latest major contract linking GCC-based investors to the Big Apple with Fosterlane Management Company, an arm of the Kuwait Investment Authority, purchasing the former Morgan Stanley headquarters just last month.
“We are pleased with our investment in YOTEL. This comes as a part of KREC’s strategy to expand its investments geographically while focusing on income-generating real estate to ensure maximum profit for both the company and its shareholders” said Ibrahim Saleh Al-Therban, Vice Chairman and Managing Director of Kuwait Real Estate Company.
The 669-room YOTEL welcomed its first guests on June 3rd and is the largest hotel opening in the city this year. Part of Related Company’s 1.2 million square foot, 60-storey LEED-Silver complex, YOTEL has the benefit of an enviable address at West 42nd Street and 10th Avenue in Times Square.
For IFA HR, the opening of YOTEL New York marks a major milestone in its investment in the brand. As the first site outside of an airport and the largest YOTEL by far, its design will act as a blueprint for future city centre locations.
“We believe that YOTEL New York represents the future of the hotel industry and we have found experienced, flexible and creative hotel investors who see the same potential for its tremendous success that we do. Everything about this hotel, from its LEED-certified engineering and ergonomic workstations to the way luggage stores perfectly under the bed has been painstakingly designed with our guests’ convenience and comfort in mind. It is the pinnacle of affordable luxury,” Joe Sita, President of IFA Hotel Investments, which is the appointed Asset Manager of the YOTEL NYC property, added.
“From a financial perspective, we anticipate significant returns on our investment in YOTEL New York. From an industry perspective, we hope this transaction serves to further boost banks’ and investors’ confidence that there are still strategic opportunities available in the hospitality market – YOTEL is certainly one of them,” Al Bahar added.