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Bridgeton Holdings Secures Funding for Downtown Office-to-Hotel Conversion

Continuing Trend of Turning Older Office Product into Residential Condos, Hotel Properties Within the City Hall Submarket
October 8, 2018
New York-based developer Bridgeton Holdings has closed on $57 million in financing to complete its second Manhattan hotel project, the Walker Hotel Tribeca.

The capital markets team of commercial real estate services firm Newmark Knight Frank arranged the funding on behalf of Bridgeton, placing the loan package through Bol Federal Bank.

Originally a 10-story office building within the City Hall submarket, the property will be converted into a 171-key hotel in a neighborhood that is beginning to see office conversions to answer housing and hospitality demand. Located at 396 Broadway, the building straddles the neighborhood line between the Tribeca and City Hall submarkets.

Of 26 hospitality properties currently under construction in Manhattan, just one other is rising in the Tribeca neighborhood and there are no other projects under construction or renovation within City Hall, according to CoStar data. There are a total 559 hotel properties currently operating within Manhattan.

In its latest report on the City Hall submarket, the CoStar Market Analytics team wrote:
Specifically, new, efficient, collaborative space is drawing demand, while owners of older assets are using a combination of conversions and capital infusions to keep their stock competitive. While some owners in City Hall may choose to follow in the footsteps of [New York-based real estate developer] Alchemy – whose conversion of the top floors of the Woolworth Building into residential condos will remove close to 140,000 square feet from the submarket’s commercial inventory – tempering in both the luxury condo and hotel markets could tip the scales in favor of renovation.

As part of Bridgeton's redevelopment and conversion, the property will be outfitted with food and beverage outlets on the ground floor and rooftop, as well as a speakeasy in the cellar. The property was originally built in 1915.

Bridgeton Holdings bought the corner masonry building for $42 million in cash, or $686 per square foot, from investor Isaac Chetrit in 2014, according to CoStar data. It was vacant at the time of sale with zoning that permitted office, residential or hotel use.

See CoStar COMPS #2992536.
Bridgeton’s first Walker flag-branded hotel is based in nearby Greenwich Village, at 52 W. 13th St.

  For the Record: Jordan Roeschlaub, Dustin Stolly, Nick Scribani, Chris Kramer and Bob Tonnessen of Newmark Knight Frank worked to arrange financing. Bridgeton was represented in-house by Chief Executive Atit Jariwala, Managing Director Akash Sharma and Vice President of Development Conor O’Byrne.

Diana Bell, New York City Market Reporter  CoStar Group   
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