All terms of the financing are confidential.
George Smith Partners successfully placed $212,250,000 of non-recourse, senior construction financing for the development of a 240-key, dual-branded, 5-star Montage and Pendry resort in La Quinta California. The 525-acre project encompasses multiple construction and financing phases and will offer luxury residential and hospitality spaces. The Hotel and Residences are designed around a world-class Arnold Palmer golf course. The Project’s design aesthetic combines modern elements with classic desert architecture.
This initial financing includes a 140-key Montage Resort, a 200-key Pendry Resort, a shared-services building, and a golf club house as well as several Montage and Pendry branded residences and condominium units. The financing also included up to an additional $100MM of capital for the development of up to 29 Branded Montage Residences and 66 Branded Pendry Condominium Residences. Three additional planning areas that are currently contiguous with the development site will be sold off to third party homebuilders, with the proceeds from these land sales being recontributed into the Project.
GSP was able to source a lender who not only shared the Sponsor’s vision and passion for the Development, but also recognized the Sponsor’s ability to execute complex, large-scale master planned developments. Despite the complex takedown structure, GSP devised, planned and executed a creative structure that provided the Sponsor with sufficient loan proceeds, while minimizing the Lender’s risk profile throughout the development.
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$115,000,000 of Non-Recourse High-Leverage Senior Construction Financing for the Ground Up Development of a 326-Key Four-Star Radisson BLU Hotel in Anaheim, CA
December 5, 2018
George Smith Partners placed a $115,000,000 non-recourse senior construction loan for the ground up development of a 326-key four-star Radisson BLU Hotel in Anaheim, CA. The Property is located in the Disneyland/Anaheim Convention Center submarket less than 1 mile from Disneyland Park. Once completed, the 12 story luxury hotel will be one of the few four star offerings available outside the Park and will feature an innovative, modern design. The amenity rich property will include a rooftop pool and deck with unobstructed views of the famous Disneyland nightly fireworks show and surrounding area. Catering to the Park-going family travelers, bunkbeds will be included in over half the rooms, and the hotel will feature a ground floor pool as well as upscale food and beverage offerings.
The Project will be the first major development east of Interstate 5 in the Disneyland submarket. Additionally, the Hotel is slated to be the 4th Radisson BLU in the United States and will be one of the first four-star offerings available outside of the Disneyland Park.
GSP focused on the submarket’s underlying fundamentals, including 28 million annual visitors, as well as its resilient occupancy rates and average daily rates that stayed relatively consistent through the recession. GSP also demonstrated that the Hotel is likely to capture an outsize share of the submarket’s 4 million annual international visitors. This is due to Radisson’s strong international branding supported by the fact that nearly all 300 Radisson BLUs are located outside the United States. Finally, GSP highlighted the Hotel’s upscale nature, which currently does not exist outside the Park, family friendly design and strong amenity package.
These efforts resulted in a high leverage, non-recourse execution.
$17,725,000 Non-Recourse Construction Financing for a 127-Key Cambria-Branded Lifestyle Hotel in the Roosevelt Row Arts District of Phoenix, AZ
October 10, 2018
George Smith Partners secured $17,725,000 in non-recourse construction financing for the development of a 127-key Cambria-flagged lifestyle hotel in the Roosevelt Row Arts District of Phoenix, Arizona. This financing facility allowed the Sponsor to begin construction on the first of several projects slated for delivery within Roosevelt Row (Ro2). The Sponsor won a city-led RFP bid earlier this year that provided them with control and ownership of four contiguous city blocks within the core Ro2 area. This was the Sponsor’s first lifestyle branded hotel development and their first hotel development within the state of Arizona. These facts presented a challenge for many groups, despite their extensive experience developing other asset classes, including Monroe 44, the tallest residential building in Arizona.
GSP sourced a hospitality lender who shared the Sponsor’s vision and excitement about the revitalization of the historic community, recognizing their ability to execute this project under the Cambria Brand. Despite several collateral restrictions presented throughout the application process, GSP was able to facilitate creative alternative scenarios for security of both Lender and Sponsor, ultimately achieving a mutually agreeable solution and additional proceeds to cover the new shortfall. The three year floating rate note was priced at 1 Month LIBOR + 7.50%, and was sized to 68.0% of project costs.
Hotel Refinancing: $33,225,000 Bridge Loan – Construction Refinance for a 213-Key Boutique Lifestyle Hotel
May 16, 2018
George Smith Partners successfully closed a construction take-out and bridge refinance for a 213-key boutique lifestyle hotel located in the Southwest. The proceeds were used to refinance costlier construction financing, including a mezzanine facility. The loan featured an earnout of additional proceeds as well as a capital improvements budget. The hotel recently opened and thus significant operating history was not available. Additionally, the in-depth rehabilitation elevated the exterior corridor hotel to a new market segment which brought with it unique challenges.
GSP’s mandate was to source a lender who not only had the ability to execute in a timely fashion, but one who recognized the value in the excellent location and strategic positioning of the Hotel. The selected lender needed to have a deep understanding of all aspects of the deal, from a millennial-focused customer demographic, to the significant food and beverage component reflected in the Hotel’s two restaurants and secret whisky bar.
The selected lender was able to recognize the unique value proposition of the property and the strong sponsorship involved in the project.
April 4, 2018
George Smith Partners has arranged $25,200,000 (85% of project costs) of non-recourse acquisition and redevelopment financing for an un-flagged, family run, 120-Key select-service hotel in Davis, California. To date, the Property has not undergone any significant renovations since opening in the 1980’s. Despite the properties’ dated appearance, the hotels close proximity (less than half a mile) to the UC Davis campus has provided it with ample foot traffic resulting in attractive operating metrics. Over the last three years, the property has consistently produced significant positive Operating Income solidifying the Sponsor’s business plan and confirming that extensive property wide renovations would lead to significant value creation. In addition to completely renovating the Property, the Sponsor plans to re-flag the property with a high quality, nationally recognized brand.
GSP identified a capital provider who was comfortable providing fixed-rate leverage, providing a needed level of security to the client against an increasing rate environment. This structure was a crucial factor in the decision making process for the Sponsor, as the high proceeds level at 85% loan to cost made the project even more sensitive to changes in index rates.
Hotel Refinancing San Francisco: $45,000,000 Bridge Loan – Construction Refinance for a 131-Key Luxury Lifestyle Hotel in San Francisco
March 14, 2018
George Smith Partners successfully closed a construction take-out and bridge refinance for a 131-key luxury/lifestyle hotel located in the heart of the trendy Mid-Market neighborhood of San Francisco. The proceeds were used to refinance costlier construction financing, including a large mezzanine facility. The loan featured an interest reserve, T&I reserve, and a working capital reserve. Additionally, the existing capital stack included Historical and New Market Tax Credits, and EB-5 Capital – adding to the overall complexity of the Transaction.
GSP’s mandate was to source a lender who not only had the existing wherewithal to understand the complex existing capital stack, but also one who would recognize the value in the unique and strategic positioning of the Hotel. From non-traditional lodging options, to significant Food and Beverage offerings, the Hotel stands out from the traditional hotel offering by spanning over multiple lodging markets: luxury and lifestyle. The seasoned Sponsorship group has a proven track record of developing and operating hotels of similar caliber.
The selected lender was able to recognize the unique positioning of the property’s offering and the strong sponsorship involved in the project.
All Terms Confidential
January 31, 2018
George Smith Partners successfully arranged $4,300,000 to refinance a 15 key motel on Coronado Island, San Diego. GSP identified a local lender who understood the Sponsor’s entitlement play based on their past success, their proposed development plans post entitlement, and the value of the land, which was exempt from any influence of the California Coastal Commission. Ultimately, the lender sized the loan to 66.8% of “As Is” appraised value. The two-year interest only note is priced at 4.50% above LIBOR and has 2 six-month extension options. Upon successfully obtaining the required entitlements, the Sponsor plans to refinance with a construction loan for a planned 39 key hotel.