Walker & Dunlop Inc. has secured a $112.5 million loan to refinance the Ace Hotel Brooklyn, a 13-story, 287-room full-service hotel in New York.
Walker & Dunlop Capital Markets Institutional Advisory arranged the transaction for an affiliate of GFI Capital Resources Group Inc. and Spruce Capital Partners. Aaron Appel, Jonathan Schwartz, Adam Schwartz, Keith Kurland, Dustin Stolly, Michael Brown, Sean Bastian and Cole Grims arranged the leasehold bridge loan from Torchlight Investors. Loan proceeds will be used to retire existing senior debt and preferred equity, including that provided by Corten Real Estate, as well as to fund closing and financing costs.
Jay Morrow and Carter Gradwell of Walker & Dunlop Hospitality partnered alongside the Capital Markets team to advise GFI Capital Resources Group Inc. and Spruce Capital Partners throughout the process.
The hotel is located at the intersection of Fort Greene, Boerum Hill and Downtown Brooklyn, with access to six subway lines providing direct connectivity to Midtown Manhattan within 30 minutes. It is surrounded by landmarks such as the Brooklyn Academy of Music and Barclays Center, as well as the boutique-lined neighborhoods of Boerum Hill and Brooklyn Heights.
“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 Brown, managing director, Walker & Dunlop. “These factors have limited new hotel development and reduced existing supply, while tourism demand continues to surge, with more than 64 million visitors expected in 2025. We are pleased to support and arrange this transaction alongside our valued partners at GFI Development, Spruce Capital Partners and Torchlight.”
The hotel offers two food-and-beverage options, along with three fully leased ground-floor retail spaces occupied by Black Seed Bagels; Take Me With You, a bespoke gift boutique; and Finer Sounds, a record store. Additional amenities include event space, 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,” said Stan Spiegelman, COO, 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. The market is benefiting from a rare convergence of strong macroeconomic tailwinds, sustained expansion within Brooklyn’s hospitality sector and best-in-class execution by the team at Ace Hotel Brooklyn. We are grateful to Walker & Dunlop for their partnership and support in successfully bringing this transaction across the finish line.”
