New York, N.Y. — In the largest leasehold transfer in New York City this year, a once-glamorous hotel located steps from Central Park will begin new life next year as a luxury cooperative apartment building, thanks to $110 million in financing arranged by AFC Hotel Finance Group.

The funds were used by the 25-story building’s new owner to finance the leasehold acquisition and renovation to apartments of Intercontinental Central Park South Hotel, according to Peter Berk, President of AFC Hotel Finance Group, who originated and placed the transaction. Renovations will begin next month to transform the 208-room hotel into 67 luxury cooperative residences.

The transaction was structured with a first mortgage and mezzanine component, Mr. Berk points out. Cooperative ownership of the residences was dictated by the fact that the land under the building structure is leased for 99 years. But the building will operate like a condominium, he explains, with owners able to sell or sublet their apartments without board approval.
“This deal is proof of the continued strength of the residential market and the world-class location of this asset,” Mr. Berk comments.

The transaction has also returned the building to its original use. Situated at 112 Central Park South, the hotel originally debuted in 1927 as a residential building and was later converted into lodging. Formerly a Ritz Carlton franchise, the hotel operated as the InterContinental Central Park South until it closed this month.

Renovations will include the complete demolition of the building’s interior to make way for the new cooperative apartments and new building systems. The classic limestone facade of the structure will be cleaned and new windows will be installed.

With sales expected to begin by the end of the year, the converted building will be extended to 28 stories to accommodate new penthouse units. The new one-, two- and three-bedroom residences will range in size from 1,000 to 2,365 square feet and are expected to be priced from one-to-five-million dollars. More than 5,500 square-feet of retail space will occupy the ground floor.

© Copyright 2005, AFC Realty Capital, Inc. All rights reserved.