The Westin New York Grand Central is about to get some upgrades thanks to fresh financing.
A joint venture of Bain Capital Special Solutions and Smith Hill Capital provided sponsor Davidson Kempner Capital Management with a $216 million loan to refinance the hotel at 212 East 42nd Street, the Commercial Observer reported. Loan proceeds are expected to go towards capital improvements.
A JLL team including Kevin Davis, Mark Fisher and Jillian Mariutti arranged the loan at the 774-key property.
Besides Westin’s brand recognition, Smith Hill’s Brendan McCormick pointed to “really attractive supply dynamics” for the hotel market on the East Side of Manhattan as part of the rationale for his firm’s involvement.
Davidson Kempner acquired the property one block away from Grand Central from seller Host Hotels and Resorts for $302 million in 2019. Goldman Sachs provided the firm with $197 million in short-term, floating-rate debt for the deal and Davidson Kempner planned $20 million in renovations; it was the firm’s first purchase of a major hotel in the United States.
In 2023, Davidson Kempner paid down $63 million in principal from the Goldman Sachs loan and secured a $150 million loan from Apollo Global Management.
The 41-story hotel was developed in 1981 by Harry Helmsley. It included design touches like a red-and-gold carpet and a pair of attached golden H’s mounted over the front desk. Leona Helmsley, the “Queen of Mean,” reportedly lorded over the hotel’s operations and staff.
Her estate sold the property in 2011 for $313.5 million to Host Hotels, which closed it for 18 months and spent $75 million to renovate and replace the dated design. Host Hotels repositioned the property and opened it in 2012 under Marriott International’s upper-upscale Westin brand.
Smith Hill (whose parent company is Procaccianti Companie) and Bain formed a joint venture two years ago to provide capital solutions to hospitality ventures. In the spring, they lent $235 million to refinance Gurney’s Montauk Resort on Long Island.
— Holden Walter-Warner
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