Hip hotelier André Balazs is baffled by the way Crain’s broke the news yesterday of his company’s move to refinance four hotels—Times Square’s Hotel QT and the Standards in Los Angeles, Hollywood and Miami. (“Hotelier selling assets in refinancing move,” the Crain’s headline now reads; it has apparently been softened since yesterday.) We called Mr. Balazs today at his office in Manhattan to hear his thoughts on the recent business move and yesterday’s media maelstrom.
“Quite frankly, we’re a little surprised about Crain’s much-ado-about-nothing,” explained Mr. Balazs, 50, who hired firm Eastdil Secured to broker the forthcoming deal.
While the article in question characterizes André Balazs Properties’ re-financing decision as a move to “sell assets” and “court investors,” the Hungarian-born businessman—who reportedly has no immediate plans to sell Soho’s The Mercer, Hollywood’s Chateau Marmont, Miami’s The Raleigh and Shelter Island’s Sunset Beach—doesn’t quite see it that way.
“It was financing. You know, we recently re-financed a bunch of the other properties and restructured them to take advantage of the capital markets. And these are all now stabilized properties that it’s just an opportune time to refinance them, meaning that they’ve been open long enough, and they’re steady and mature hotels,” Mr. Balazs, who co-hosted a party last night for Tommy Hilfiger and George Lois, told us.
Mr. Balazs estimates that in his 15 years in the hotel business, he has overseen some six or seven nearly-identical transactions. “It’s a routine re-capitalizing and restructuring [of] the underlying debt or equity. We do it all the time. We control the management and control the properties.”
Because of the four major Balazs projects currently underway in New York—added to the fact that three of the four hotels being re-financed are in other cities—we asked him if the company means to focus future projects in the New York market. But apparently that’s not really the case, either.
“We have a lot going on in New York right now, but we also have a number of projects that I can’t really go into detail because we’re in the early stage—Central America and in Europe,” he said, “So, no, we’re not focused on New York.”