JLL’s Hotels & Hospitality Group arranges $54 million refinancing for Baron’s Cove

Sag Harbor, NY JLL’s Hotels & Hospitality Group announced today it has arranged a $54 million refinancing of Baron's Cove, a 67-room luxury boutique hotel.

JLL worked on behalf of the borrower, a partnership between Blue Flag Capital and Bain Capital Real Estate, to secure a three-year, floating-rate loan through Blue Owl Capital-managed funds.

Baron's Cove, located at 31 W Water St., features 67 well-appointed guestrooms, including luxurious lofted suites with panoramic harbor views and private garden accommodations. Built in the late 1950s and renovated in 2015, the property offers a comprehensive resort experience with amenities including a seasonal saltwater pool, lounge, complimentary bicycles and kayaks, a full-service wellness center, a tennis court and signature dining options at The Restaurant at Baron's Cove and The Lounge.

The financing package will be used for a comprehensive renovation scheduled to begin in October 2025. The seven-month project will enhance all aspects of the guest experience, including complete guestroom transformations, reimagined public spaces and upgraded exterior areas. The renovation will coincide with a strategic rebranding initiative and introduction of elevated food and beverage concepts. The financing also provides funds to secure employee housing, addressing a critical operational need in the high-cost Hamptons market while allowing the sponsors to recapitalize from their initial acquisition financing.

Located in the heart of Sag Harbor, one of the most affluent villages in the Hamptons, the hotel sits just 11 miles from Southampton, seven miles from East Hampton and less than a three-hour drive from New York City. The property benefits from its prime waterfront location near Sag Harbor's historic marina, positioning it at the center of the area's boating and yachting activities.

The Hamptons attract approximately seven million visitors annually, drawing from the roughly 18 million people located within a three-hour drive. While the area's high season traditionally runs from May through September, Sag Harbor has evolved into a year-round destination due to wealthy New Yorkers establishing permanent residences in the area.

The JLL Hotels & Hospitality team was led by Americas CEO Kevin Davis, managing director Mark Fisher, senior director Jillian Mariutti and director Connor Medzigian.

"Baron’s Cove presented a unique opportunity to finance a high-quality boutique hotel in an ultra-high-barrier-to-entry market that caters to an affluent clientele, backed by experienced institutional sponsorship," said Davis. "The Hamptons hotel market continues to demonstrate remarkable resilience with limited new supply and increasing demand from affluent travelers seeking luxury accommodations in prestigious coastal destinations."