UK-based digital bank OakNorth has extended a $45 million loan to real estate investment company Aya New York. The financing is designated for the acquisition and comprehensive renovation of the Cassa Hotel, a 166-key property located in Midtown Manhattan.
The project will see the hotel at 70 West 45th Street undergo a significant transformation. Following the refurbishment, the property will be rebranded as "Lady D" and managed by Hersha Hospitality Management, a prominent hotel operator.
Key Takeaways
- Financing: OakNorth provided a $45 million loan to Aya New York.
- Project: The funds will be used to acquire and refurbish the 166-room Cassa Hotel in Manhattan.
- Rebranding: The hotel will be relaunched under the new name "Lady D" after renovations.
- Management: Hersha Hospitality Management will operate the newly renovated hotel.
- Borrower: Aya New York is a real estate firm specializing in repositioning underperforming assets in prime NYC locations.
Details of the Financing and Property
The $45 million loan from OakNorth provides essential capital for Aya New York's plan to revitalize a key Midtown hospitality asset. The Cassa Hotel is situated in a prime location, offering proximity to major city landmarks and business districts.
Built in 2010, the property is part of a 48-story mixed-use building. In addition to the hotel rooms, the structure includes a restaurant on its lower level and residential condominiums on the upper floors. The renovation effort aims to modernize the hotel portion and position it competitively within Manhattan's vibrant hospitality market.
About the Cassa Hotel
The Cassa Hotel is located at 70 West 45th Street, placing it near Times Square and the Theater District. Its mixed-use design is common for modern high-rise developments in New York City, combining hospitality, residential, and commercial spaces in a single tower.
Aya New York's Investment Strategy
Aya New York, founded in 2009 by real estate professional Amir Shriki, has established a significant presence in the city's property market. The company focuses on identifying and acquiring assets it deems "distressed" or "mismanaged" in sought-after locations.
The firm's strategy involves investing in these properties to unlock their underlying value through repositioning and improved management. According to company information, Aya New York has been involved in transactions totaling more than $4.5 billion since its inception, demonstrating a substantial track record in the competitive New York real estate landscape.
"Our strategy has … been to identify underperforming assets with strong underlying fundamentals and reposition them into … properties. The Cassa Hotel is an … example of this approach," stated Amir Shriki, Founder of Aya New York.
Shriki emphasized the hotel's prime location as a key factor in the investment. He expressed confidence that with the right capital and operational expertise, the property can be transformed into a landmark destination once again.
The Future of the Hotel: Rebranding and Management
A central part of the revitalization plan is the hotel's rebranding. Upon completion of the refurbishment, the property will be relaunched as Lady D. This new brand identity is intended to create a fresh and distinct presence in the market.
To ensure the operational success of the rebranded hotel, Aya New York has partnered with Hersha Hospitality Management (HHM). HHM is an established operator with a large portfolio across North America.
Hersha Hospitality Management at a Glance
- Operates over 250 hotels across the United States and Canada.
- Manages a diverse portfolio of hotel brands and independent properties.
- Brings extensive experience in hotel operations, marketing, and revenue management.
The selection of HHM is a strategic move to leverage its extensive experience in managing and optimizing hotel performance. This partnership is expected to be crucial in establishing Lady D as a successful hospitality venue in Midtown Manhattan.
OakNorth's Perspective on the Transaction
For OakNorth, this transaction highlights its continued activity in providing specialized financing for commercial real estate projects. The digital bank often works with established sponsors on complex projects that require tailored lending solutions.
Tommy Tran, Director of Debt Finance at OakNorth, commented on the deal, praising Aya New York's history and leadership.
"As a direct result of Amir’s leadership and experience, Aya New York have built a … track record in New York real estate, demonstrating an ability to execute complex projects and deliver strong outcomes for investors and communities," said Tran.
Tran also noted that the deal exemplifies OakNorth's capacity to support sponsors with ambitious growth plans. He added, "We are excited to play a role in bringing the Cassa Hotel back to life and contributing to Midtown’s vibrant hospitality market." The loan signifies a vote of confidence in both the project's potential and the continued recovery of New York City's tourism and hospitality sector.
