Why relationships drove $50M Raleigh rebrand

RALEIGH, North Carolina — The head of investments for Mavik said many of its transactions happen because of long-standing relationships. The $50 million construction loan it provided last week for the redevelopment of a hotel in Raleigh, North Carolina, was no different.

“Many of our transactions come through long-standing relationships with existing borrowers, as was the case here,” said Dan Cooperman, head of investments at New York City-based Mavik. “Given the pre-existing working relationship, we can move quickly and with limited friction to produce outcomes benefitting all parties.”

Dan Cooperman

Mavik provided New York City-based Tidal Real Estate Partners a $50 million construction and renovation loan to redevelop the Downtown Raleigh Holiday Inn into a 204-key lifestyle boutique hotel under IHG’s Hotel Indigo brand.

As a sign of the times, the renovation represent a significant departure from the original plans for the property. In 2022, Tidal revealed plans to demolish the current hotel for a 20-story tower that would have featured a Kimpton brand, including apartments and a parking structure, according to a story in the Triangle Business Journal. 

Tidal partnered with Winchester, Massachusetts-based John Moriarty & Associates and Chicago-based Landrock LP to close on a $71 million capitalization of the project, which included Mavik’s $49.95 million loan.

“Mavik and Tidal’s long-standing relationship and existing partnership on other deals keep us in front of one another. So, when a new deal is presented, we are seeing it in real-time and often before others,” Cooperman said, noting that a few weeks before Mavik and Tidal teamed up on a 312-key Marriott-branded dual-use hospitality and residential development in Nashville.

The Holiday Inn originally opened in Raleigh in 1969 as a Holiday Inn. Tidal acquired the property in 2021 for $23.8 million. The hotel closed operations this month and construction is set to begin this summer, with plans to open the reimagined property as Hotel Indigo Downtown Raleigh in late 2026.

Raleigh is an increasingly high-performing hospitality market backed by multiple demand drivers and solid market fundamentals, said Ken Copeland, president of Tidal.

Ken Copeland

When asked about the biggest ROI-producing spaces that will be part of the renovation, Copeland mentioned a signature space at the top of the hotel.

“We are renovating and upgrading Raleigh’s only top-floor penthouse bar and event space. The top floor will once again be a premier social space in the city,” he said.

The project includes a renovation of the property, featuring upgraded guest rooms, a redesigned lobby, and a lounge. The deal also incorporated historic tax credits to preserve the building’s architectural character as part of the renovations.

“This project is notable for preserving the building’s architectural character while modernizing it to meet contemporary boutique hospitality standards,” Cooperman said. “Deploying flexible capital for redevelopments involving historic structures adds another level of complexity.”

The property will be managed by Denver-based Sage Hospitality Group, which has extensive experience with boutique hotels and food and beverage operations.