IEPlus: Carlton Group completes recapitalization of luxury Milan’s Four Seasons

International real estate investment banking firm Carlton Group has announced the closing of a €250m recapitalization and discounted loan payoff at the Four Seasons Hotel in Milan, Italy.

The Four Seasons Milan is one of Milan’s most luxury hotels and has 114 rooms, with 51 suites, two five-star restaurants, a high-end spa and a high-street retail store in the Montenapoleone district of Milan.

“This transaction, which was in the works for over six months, continues to demonstrate Carlton’s unique ability to access capital and to close transactions even though liquidity in Europe is scarce,” the firm said.

The closing was challenged by the volatility which continues to affect European real estate and financial markets.

Carlton was able to access a balance sheet investor who funded the transaction that enabled the client to buy their loan back at a discount and maintain ownership of the property without bringing in any other equity investors.

“This transaction is a precursor to other discounted loan payoffs which will inevitably occur, now that financial institutions with European exposure look to monetize underwater loans,” said Howard L. Michaels of the Carlton Group, who arranged the transaction between The Four Seasons property owner, the London money manager who provided the capital and the financial institution who sold the loan.

In November, Carlton closed approximately $2bn large and high profile transactions among which a $700m portfolio sale with a sovereign wealth investor, a €130m Croatian hotel & apartment portfolio recapitalization and a €250m recapitalization of two five star Iberian Hotels.

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