Ace Brooklyn owners secure $112.5M refi

NEW YORK CITY — A pair of New York City-based companies, an affiliate of GFI Capital Resources Group, Inc. and Spruce Capital Partners, have secured a $112.5 million loan to refinance the 287-key Ace Hotel Brooklyn in New York City.

Walker & Dunlop arranged the leasehold bridge loan from New York City-based Torchlight Investors. Loan proceeds will be used to retire existing senior debt and preferred equity, as well as to fund closing and financing costs.

Philadelphia-based Corten Real Estate also said it has exited a preferred equity investment made in the hotel as part of the refinance. Corten originally invested in the property in February 2021, with funding from both a separate account it manages and Corten Real Estate Fund I LP.

The Ace Hotel Brooklyn offers F&B and event operations along with three fully leased ground-floor retail spaces that are currently occupied. Additional amenities include an event space and a ballroom, and a fitness center.

“New York is one of the most desirable hospitality markets in the country and is positioned for continued outsized year-over-year growth. Among the Top 25 lodging markets, New York ranks second nationally in RevPAR growth,” said Stan Spiegelman, COO at GFI. “The refinancing of Ace Brooklyn positions the hotel and our investors to continue capturing the exceptional growth potential we see across New York City. GFI’s core investment thesis for the coming years is grounded in our conviction in the continued strength of the New York City hospitality markets, which remain a key focus of our capital deployment.”

“New York City remains the most supply-constrained hotel market in the country, driven by significant regulatory barriers including the Safe Hotels Act, zoning amendments requiring special use permits, and Local Law 18, which restricts short-term rentals,” said Michael Brown, managing director at Walker & Dunlop. “These factors have limited new hotel development, reduced existing supply, while tourism demand continues to surge, with more than 64 million visitors expected in 2025.”

“GFI’s vision, the Ace brand, and this unique location made the deal compelling from the outset,” said Brandon Flury, principal at Corten. “While the New York City hospitality market has once again proven its resiliency through its post-COVID resurgence, what ultimately made the investment successful was the alignment we had with our partners on how best to operate and optimize the asset-level business plan. We couldn’t be happier with the outcome and look forward to being an accretive, strategic investor alongside GFI and other best-in-class operating partners in the very near future.”