D2 Capital Advisors Arranges $48.6 Million Hotel Construction Financing

Construction of North Loop boutique hotel to start with $48.6 million in construction financing

By Dirk DeYoung – Editor, Minneapolis / St. Paul Business Journal

A two-year-old proposal for a North Loop boutique hotel, put in doubt by the pandemic-spurred crash in travel, is now slated for construction with $48.6 million in new construction financing.

The hotel’s developer, Commutator LLC, announcing the funding in a news release on Tuesday, saying that construction on the 123-key hotel will start in this month with the hotel’s opening is expected in the first quarter of 2023.

The project involves rehabilitating the Commutator building at 125 N. First St. in Minneapolis - a location kitty-corner from the former Bachelor Farmer restaurant - as well as the nearby building at 121 N. First St. and constructing a six-story modern addition that ties the two together. The hotel portion of the project was first disclosed in September 2019.

Back in March of this year, Commutator, which is led by David Wilson, John Gross, and Andrew Commers, had floated a Plan B to the Minneapolis Planning Commission, swapping in 73 apartments in a slightly shorter modern addition. The need for a Plan B reflected the difficulty that developers had encountered trying to finance hospitality projects during the pandemic.

That difficulty has evidently waned. According to the news release, the financing was arranged by D2 Capital Advisors’ Jack Cortese and David Frankel and is being provided by an unnamed Seattle-based REIT.

“The project has very strong sponsorship, a national and international award-winning team, and is located on the most popular block in the hottest sub-market of Minneapolis,” said Jack Cortese, vice president of East Norriton, Pa.-based D2 Capital Advisors, in a statement. “And for those reasons and more, we were able to overcome the challenges of financing a boutique luxury hotel development amid the current lending environment.”

The yet-to-be-named 133,000-square-foot hotel will include a rooftop bar, a cellar dive bar, meeting and event space, a signature restaurant and retail space for lease.

The project is being designed by Minneapolis-based Snow Kreilich Architects, with interiors being designed by Neri & Hu, based in Shanghai. Minneapolis-based Greiner Construction will serve as the general contractor.

Sources: https://www.bizjournals.com/twincities/news/2021/10/12/proposed-north-loop-boutique-hotel-lands.html