Key information
- SectorHospitality
- TypeSenior mezzanine loan
- StrategyDirect lending
- Websitehttps://moxytimessquare.com/
2021
Year of investment
3-year term
Tenure of loan
United States
Geography
About
Moxy Hotel is a vibrant hotel brand designed for the modern traveller, combining stylish design with affordability. Positioned in key urban locations, Moxy aims to provide an energetic atmosphere with a focus on social experiences.
Why we invested
We invested in the development of a Moxy Hotel due to the opportunity it presents for low leverage financing, specifically at 61% loan to cost. In the context of a challenging hotel market - where 12 months post-COVID 20% of existing hotels in New York were anticipated to close due to new local regulations restricting supply - Moxy offered a compelling risk-return profile.
Value creation
The investment in Moxy Hotel not only captures the resurgence of the hospitality sector but also features a loan tenure of three years with the option for two one-year extensions, providing flexibility for future growth. The hotel provided an attractive risk/return opportunity given the low leverage and a coupon rate of SOFR + 1,350 basis points.
Sustainability
Investing in the Moxy Hotel aligns with sustainable development principles, as it supports an experienced developer and operator in launching a new property amid market disruptions. This initiative contributes to revitalising the local economy while adhering to sustainable operational practices.
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