BGL Real Estate Advisors Completes Development Financings for Dual-Branded W Residences and W Hotels by Marriott in Downtown Cleveland
CLEVELAND, Jan. 6, 2025 /PRNewswire/ -- Brown Gibbons Lang & Company (BGL) is pleased to announce the financial closing of the Erieview Tower & Galleria redevelopment in Cleveland, Ohio. Huntington National Bank, Midland States Bank, PPG, TurnDev, Cleveland-Cuyahoga County Port Authority, Peachtree PACE, and the Ohio Brownfield Remediation Program provided development capital, and BGL's Real Estate Advisors team served as the exclusive financial advisor to Kassouf Development (the Developer) on the project.
The Erieview Tower conversion will feature 227 W branded by Marriott luxury residential apartment units, enabling residents to enjoy the same high-end living experience that Marriott's award-winning W brand offers its hotel customers. These include access to concierge, housekeeping, doorman, bellman, and butler services, in addition to all hospitality and experiential amenities, and to the connected retail Galleria.
The hospitality component will bring another 210 W branded by Marriott luxury hotel rooms under the W Hotels flag and marks the first W Hotels offering in the state of Ohio. The property will feature a rooftop bar, fine dining restaurant, spa, fitness center, lobby lounge, office spaces, and a 15,000-square-foot ballroom.
The dual-branded W Residences + W Hotels project, with a combined cost of more than $218 million, is a unique and limited concept that Marriott offers worldwide, but with only eight other locations in the United States. The redevelopment will transform the existing Erieview Tower and Galleria – listed on the National Register of Historic Places – into an entertainment destination for the City of Cleveland. Construction will be phased by component, with residential construction commencing immediately, hotel construction beginning later in 2025, and the project expected to be completed in late 2026. The developers will begin interviewing for a marketing firm to promote both office and retail spaces.
"The BGL team has demonstrated their expertise and creativity in structuring the financing for this phase of the Erieview Tower and Galleria redevelopment project. As early as 1908, when my grandfather rented a news and fruit stand at the corner of East 9th Street and St. Clair Avenue, 117 years later, my family is redeveloping the entire block. We have been committed to Cleveland, and we're proud to see that commitment continue with the revitalization of this important historic district," shared James Kassouf, CEO of Erieview Developer.
The Kassouf family purchased Erieview Tower in 2018, and has worked since the acquisition to secure the various capital sources needed for the significant investment required to reposition the asset, including: Round 29, Ohio Historic Preservation Tax Credit Program; Ohio Senate Bill 225, doubling the State Historic Tax Credit; Round 2, the Ohio Transformation Mixed Use Development Credit; commercial real estate tax abatement; residential real estate tax abatement; and a non-school TIF abatement. Another major component of the financial structuring was locking the senior loan via an interest rate swap contract in July 2022, which fixed the pricing of the 10-year treasury for a 10-year loan term.
BGL, along with Kohrman Jackson Krantz (KJK), represented the Developer in coordination with an extensive team of professionals that included: (i) TurnDev, (ii) Berardi + Partners, Inc., (iii) Turner & Townsend, (iv) Novogradac & Company LLP, (v) BakerHostetler LLP, (vi) Polsinelli, (vii) Bricker Graydon, (viii) Roetzel & Andress, (ix) DiPerna & Co., (x) Rockwell Architecture Planning and Design, P.C., (xi) Beyer Blinder Belle, and (xii) Independence Construction. TurnDev is providing development services and debt financing for the project.
"The Erieview Tower redevelopment project is an important step for Cleveland, and we're proud to have been involved. We look forward to the next phase and to continuing to support efforts that drive our city forward," said Jon Pinney, Managing Partner at KJK and Founding Partner of TurnDev and TurnCap.
BGL's Real Estate Advisors Group offers comprehensive real estate investment banking services tailored to the middle market. It provides client-focused solutions with an emphasis on real estate advisory, debt, preferred and private equity placement, financial restructuring, recapitalizations, sale-leasebacks, structured finance, and asset acquisitions and dispositions across all asset classes. The team assists real estate owners and developers looking to form alliances and joint ventures with single-source capital providers to gain local and institutional access for all capital needs.
About Brown Gibbons Lang & Company
Brown Gibbons Lang & Company (BGL) is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, capital markets, financial restructurings, valuations and opinions, and other strategic matters. BGL has investment banking offices in Boston, Chicago, Cleveland, Los Angeles, and New York, and real estate offices in Chicago, Cleveland, and San Antonio. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 30 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit https://www.bglco.com/.
About The Erieview District
A 40-story tower at E. 12th and St. Clair featuring a 38th-floor restaurant, "The Top of the Town," was the spark that led to the urban renewal of the northeast part of downtown extending from E. 6th to E. 17th St., known as the Erieview District. Designed by the world-renowned I. M. Pei, Erieview Tower (1964) was the Hub of the Plan leading to the development of One Erieview Plaza (1965), The Federal Bldg. (1967), Bond Court (1971), Public Utilities (1971), and Park Center (1973). New buildings continued to be built in the area into the 1980s, including Ohio Bell, One Cleveland Center, Eaton Center, and Northpoint Tower. The Galleria was developed by Jacobs in 1987.
SOURCE Brown Gibbons Lang & Company
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