Dealmaker: Madison Realty Capital Provides $31M for Gem Hotel in Chelsea

Madison Realty Capital, New York, closed $30.5 million in financing collateralized by the Gem Hotel, a boutique hotel in Manhattan’s Chelsea neighborhood.

The funds refinanced previous debt and will allow sponsor Icon Realty Management, New York, to reposition the hotel.

The Commercial Observer reported Mission Capital Advisors arranged $33 million for the 31,000-square-foot asset in 2014.

“This deal provided Madison the opportunity to refinance a successful and established hospitality asset with strong sponsorship and a new business plan aimed at making it even more competitive in the local market,” MRC Co-Founder and Managing Principal Josh Zegen said.

Icon’s business plan includes a capital improvement plan with room upgrades, lobby and hallway improvements and facade work, a branding overhaul and a new marketing strategy across Internet booking channels and corporate accounts.

The five-story Gem Hotel at 300 West 22nd Street was constructed in 1912 as a residential property. Icon converted the property to hospitality use in 2007, installing completely new mechanical systems and making structural upgrades to the building at that time.

Located on the corner of 8th Avenue and 22nd Street, the Gem Hotel has 57 feet of prime frontage along 8th Avenue.