$23,600,000 Non-Recourse Construction Loan for a 118-Key Hotel Project in Downtown Davis, CA

Rate: L + 825
Term: 3 + 1 + 1
LTC: 82.5%
Amortization: Interest Only

Transaction Description:

George Smith Partners arranged $23,600,000 in non-recourse construction financing for the ground-up development of a 118-key select-service, extended-stay hotel in downtown Davis, California. Sized to 82.5% of total project cost, the interest only loan will float at a spread of 825 basis points over one-month LIBOR for three years and carries two 12-month extension options. With immediate access to the highway, the Project is five minutes from UC Davis and 20 minutes from downtown Sacramento. This financing allowed the Sponsor to begin construction on their third hotel project near the University.

GSP sourced a lender who shared the Sponsor’s vision and negotiated a unique and capitally efficient funding structure on the behalf of the Client. GSP demonstrated the submarket’s resilient occupancy rates and the Project’s appealing design relative to the submarket’s dated competitive set.

Advisors

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    $16,300,000 Non-Recourse Construction Loan for Development of a 115-Key Hotel; West Sacramento, CA

    October 8, 2019

    Transaction Description:

    George Smith Partners arranged $16,300,000 in non-recourse construction financing for the ground-up development of a 115-key select-service, extended-stay hotel in West Sacramento, California. The Project is located across the bridge from Downtown Sacramento on a main thoroughfare and within direct proximity to the newly built West Sacramento City Hall. The Project is well positioned as an economic alternative to travelers and a convenient option for long-term local guests. The financing allows the Sponsor to break ground on their third hotel under development in the greater Sacramento metropolitan area.

    GSP identified a capital provider who was intent on securing a long-term relationship with the Sponsor, recognizing their extensive hospitality experience and ability to execute both on the construction and on the overall business plan with a high-degree of surety. Forming this relationship earned them a highly leveraged deal, sized to north of 80% of total project costs. The interest only, non-recourse construction loan is priced at a spread of 1 Month LIBOR plus 750 basis points, with a three-year term and two 12-month extension options. GSP highlighted the submarket’s various economic drivers, demonstrating its appeal as a pioneering and cost-effective market with tremendous growth potential.

    Rate: 1 Month LIBOR + 7.50%
    Term: 36 Months with Two 12-Month Extensions (3+1+1)
    LTC: 80%
    Amortization: Interest Only
    Guaranty: Non-Recourse

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    $460,000,000 Non-Recourse Senior Construction Financing for the Ground Up Development of Block 216, a 35-Story Mixed-Use High-Rise Anchored by a 251-Key Ritz Carlton Hotel; Portland, OR

    July 24, 2019

    Transaction Description:

    George Smith Partners structured and placed a $460,000,000 non-recourse senior construction loan for the ground up development of Block 216, a landmark 1.1 million square-foot ground-up high-rise development in the heart of Portland, Oregon’s central business district. The 35-story luxury high-rise will be anchored by a 251-key five-star Ritz-Carlton hotel, the first five-star hotel in Portland. The development also features Ritz-Carlton branded residences, 140,000 square feet of Class A office space, and 7,800 square feet of ground floor retail, which will open up to a pedestrian “festival street.” Located at the intersection of the Central Business and Pearl Districts, Block 216 spans a full city block. This is extremely rare in Portland. Upon completion in 2023 Block 216, will be the fourth tallest high rise in Portland and the largest tower in Portland based on square footage.

    Challenges:

    Block 216 represents the first luxury, five star hotel and branded residential project in Oregon. It is also the first project with amenities common to luxury properties but absent in Portland thus far. This ground up development is also a true mixed used project with four different uses (hotel, residential, office and retail) in a single building.

    Solutions:

    GSP focused on Portland’s incredibly strong underlying fundamentals, including: its population of 2.5 million; its unemployment rate 50 basis points lower than the national average; its 1,200 tech companies (hence the name “Silicon Forest”); the impressive number of blue chip companies with presences in the market; and, the considerable number of institutional investors active in the market. GSP also stressed the Project’s unparalleled location and walkability to every major amenity in Downtown Portland as well as the 30 new conferences booked at the Portland Convention Center as a significant demand driver for five star accommodations.

    GSP executed significant and high profile marketing to ensure the Project was appropriately received in the capital markets. These efforts resulted in a highly structured, non-recourse execution in less than six months from engagement.

     

    All terms confidential

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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

    Transaction Description

    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.

    Challenges

    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.

    Solutions

    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.

    All terms are confidential.

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    $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

    Transaction Description:

    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.

    Rate: 1 Mo. LIBOR + 7.50%
    Term: 3+1+1
    Amortization: Interest Only
    LTC: 68.0%
    Guarantee: Non-Recourse (with standard bad boy carve-outs)

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    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.

    Rate: L+535
    Term: 3 Years
    Amortization: Interest Only
    Loan to Cost: 83%
    Guarantee: Non-Recourse

  • Expand

    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

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