Long Island City, NY Joe Berko and Michael Korine of Berko & Associates along with Madison Realty Capital (MRC) completed a $27 million first mortgage loan to recapitalize on the Paper Factory Hotel at 37-06 36th St., which will open later this month. The borrower purchased the six-story 103,000 s/f warehouse in 2012 and turned the former paper factory and industrial property into a loft hotel with 122 guestrooms.
A portion of the financing will also go to fund the purchase and repositioning of two contiguous buildings located on Manhattan Ave. in the Greenpoint section of Brooklyn, also owned by the same borrower.
The initial acquisition construction financing package also completed by Berko in 2012 for the Paper Factory Hotel was $16.75 million – provided by a Canadian fund, according to Berko, who sourced a refinance from a US debt fund “at a lower rate” for the developer to use the money on both properties.
“This complicated acquisition and finance deal took great due diligence between all parties involved including the sponsor, the seller and the lender,” said Korine, who heads Berko & Associates’ finance and capital markets group. “We managed to tackle many simultaneous challenges surrounding the financing of the Paper Factory.”