Landmark Scottsdale Hotel Lands $23M Loan for Rebrand and Relaunch
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Lionheart Strategic Management LLC, an affiliate of Fisher Brothers that manages capital on behalf of third-party investors, and Schroders Capital, the private assets division of Schroders, announced that it has provided a $23.5 million mezzanine loan to Namastay Development and Hospitality Capital Partners for the renovation and recapitalization of The Monarch, a 194-key hotel located in Old Town Scottsdale, Arizona.
Leveraging the expertise and strengths of both institutions, the mezzanine loan was made in partnership by Lionheart Real Estate Credit Strategies II, Lionheart’s current closed-end venture and closed-end vehicles managed by Schroders Capital. Additional financing is being provided via a $29.5 million senior loan.
“This transaction epitomizes Lionheart’s ability to provide flexible and accretive capital solutions for value-add projects in high-growth markets,” said Andy Klein, Managing Director and Co-Head of Investments at Lionheart Strategic Management. “Scottsdale remains a robust hospitality market with consistent demand and limited new supply, especially in infill locations such as this. We’re proud to add another successful closing to our Lionheart Real Estate Credit Strategies II portfolio and to support our Borrower’s vision for this asset.”
The Monarch is being rebranded into “Hotel Solaya” a JdV by Hyatt, a collection of hotels with individual, unique character. Originally built in 1975, the hotel sits on over six acres and features a restaurant and bar, coffee shop, outdoor pool and bar, fitness center, spa and over 15,000 square feet of meeting space.
“WAY Capital is honored to serve as Namastay’s advisor in this transformative project. We can’t thank Lionheart enough for their flawless execution of this capitalization,” said Malcolm Davies, Founder & CEO at WAY Capital.'
The property is slated to undergo a multi-million dollar renovation, including comprehensive upgrades and aesthetic enhancements to guestrooms, common areas, F&B venues and exterior elements. Design will be led by Studio 11 and Dreamscape Hospitality will handle on-site property management.
“Local and adept expertise with a specialized asset class such as hospitality is paramount when executing value-add business plans in a dynamic market like Scottsdale,” said Paul Bratten, Head of US Real Estate Debt Investments for Schroders. “Schroders Capital is a global investor across the full lifecycle of commercial real estate credit. We value our partnerships and are proud to facilitate this exciting project.”
Andy Klein and Randal Gleeson led the transaction for Lionheart Strategic Management. Paul Bratten led the transaction for Schroders.