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While all of the noise in the market is about bank lending pulling back and hotels being drastically oversupplied, nothing will stop Sam Chang from building hotels.
Chang's McSam Hotel Group has secured $120M in construction financing for his planned, 520-room Hyatt Place hotel at 350 West 39th St. near Times Square. Bank of the Ozarks provided the bulk of the funds for construction with a $95M senior loan, and Square Mile Capital Management filled out the capital stack with $25M of preferred equity. Eastern Consolidated managing director Adam Hakim and director James Murad brokered the financing.
"With a revitalized theater district, thriving hospitality industry and constantly improving retail, the Times Square area is a magnet for tourists,” Hakim said in a release. The hotel is within the bounds of the Hudson Yards district.
The Hyatt Place, when completed, will have a restaurant with outdoor space, be 180K SF, and be the first of its kind around Times Square. While many banks and developers are shying away from new hotel projects, Chang has developed more than 70 hotels in New York City and Hakim said sponsor banks — particularly up-and-comers like Bank of the Ozarks — are more confident to invest in.
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