Booming hotel market prompts developer to ask for more.

CRG Realty Capital, LLC of Englewood, N.J., acting as exclusive advisor to Thompson Hotels, announced it has arranged two major construction loans totaling $88.5 million for the company's two newest boutique hotels in New York City and in Beverly Hills.

In the first deal, Wells Fargo provided $57.5 million in construction financing for the Thompson LES (Lower East Side), located on Allen Street between Houston and Stanton Streets in Manhattan. The 141-room luxury boutique hotel will feature a pool, spa, restaurant, lounge, and rooftop bar and is slated to open in late 2007.

The second deal for $31 million, provided by HSH Nordbank, will be used for the renovation and repositioning of the Thompson Beverly Hills, which is slated to open in late 2006. The hotel sits on the site of the former Beverly Pavilion Hotel on Wilshire Blvd. in Beverly Hills.

According to CRG president Mitchell Adelstein, strong market fundamentals in both the Manhattan and Beverly Hills markets "re-energized the developer to create an even higher level of finishes and amenities at both projects."

The loans represent a second round of financing of over $17.5 million that will be used to increase the number of rooms, and deliver the highest possible level of amenities and services to Thompson Hotel guests.

"Given Thompson's strong market position, our lenders felt very confident increasing the level of financing to take advantage of the improving business economy and leisure market demand," explained Adelstein.

"Occupancy remains very strong and daily room rates have increased significantly in the past year at both Thompson's flagship 60 Thompson and the Roosevelt Hotel in Hollywood leading to an increased scope for both projects."

In Manhattan, Wells Fargo increased their loan to $57.5 million after the project was expanded to 141 hotel rooms and the developer shelved plans to offer 40 condo-hotel units.

"The Manhattan hotel market remains very strong and our lender felt comfortable having Thompson spend more money to achieve something greater," added CRG executive vice president Jon Bloomberg, who explained that the original plan for the Thompson LES included condo units mixed in with hotel rooms. However, the developer scrapped these plans given the scarcity of quality hotel sites and uncertainty associated with the condominium market.

At the Thompson Beverly Hills, HSH Nordbank increased its loan to $31 million after the City of Beverly Hills approved a significantly larger rooftop lounge space, pool and larger restaurant on the ground floor.