A dual-branded hotel in New Orleans converted from a historic office building received $120 million in recapitalization funds.
Real estate private credit firm Access Point Financial and real estate and development private equity firm TMGOC Ventures co-originated a $120 million bridge loan and preferred equity investment to recapitalize the dual-branded Fairmont by Accor and Element by Westin hotels in downtown New Orleans. The property also includes Emeril’s Delmonico Restaurant and 150,000 square feet of Class A office space.
New Orleans-based Kailas Companies, a real estate development firm with more than 2 million square feet of building space in its portfolio, bought the 31-story office building in 2014 with the intention of converting it to hotel space. The property was built in 1970 and designed by Skidmore Owings & Merrill. The conversion project started in January 2024, according to a news release on the deal.
According to CoStar data, the Element opened in February, and the Fairmont is slated to open this fall.
Russ Schildkraut of Ackman-Ziff brokered the transaction.
“Naveen Kailas and Kailas Companies are an ideal hotel partner with a strong and respected local presence that knows the New Orleans market intimately,” said Dana Tsakanikas, chief investment officer at Access Point Financial.
“As we continue to expand our footprint and revitalize historic properties throughout the New Orleans market, it becomes increasingly important for us to work with well-respected credit firms who know the hospitality industry intimately,” said Naveen Kailas, chief development officer at Kailas Companies.
Kailas' projects are all in Louisiana. Last year it completed a historic landmark renovation of New Orleans' Sara Mayo Hospital into a mixed-use residential and retail development with a new-construction tower.
The dual-branded hotels are in New Orleans’ central business district, a block from Canal Street and southwest of the French Quarter. The complex is located in proximity of several demand drivers, including Tulane University, LSU Health Sciences Center, Caesars Superdome and the Biomedical District.
“Our partnership with APF on this recapitalization validates the thesis behind our preferred equity and mezzanine credit platform,” said Glenn Alba, managing partner, TMGOC Ventures. “We’re pleased to align with Kailas Companies on this landmark New Orleans asset and to deliver flexible capital to best-in-class sponsors.”