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$85,000,000 Refinance of San Diego Pendry Hotel

Rate: LIBOR + 585
Term: 4 years with a 1 year extension option
Amortization: Interest-only
Prepayment: 24 months
Guarantee: Non-Recourse

George Smith Partners successfully placed the refinance on the flagship 317 room Pendry Hotel in the historic Gaslamp quarter of downtown San Diego. The Hotel and the brand were launched in early 2017 as the new luxury hotel brand operated under the Montage platform. Pendry fills the void between service-oriented luxury hotels and design-oriented boutique hotels. In 2014, GSP successfully placed the construction financing. Proceeds from this refinance were used to repay that facility.

GSP’s mandate was to source a lender who would recognize the value in the unique attributes for this Hotel, including its unique Food & Beverage offerings. While there were numerous financing providers who were interested in this opportunity, our client ultimately selected a national debt fund that understood the strength in the asset, the strong capabilities of the Sponsor and market demand of both business and leisure travelers who will frequent the property over the coming years.

Advisors

Related Financings

  • $16,900,000 CMBS Financing for a Limited-Service Hotel; Central Coast, CA

    October 26, 2022

    Transaction Description:

    George Smith Partners successfully placed a $16,900,000 cash-out CMBS loan to fund the refinancing of a limited-service hotel located in Central California. Backed by strong travel demand, the hotel was performing better than ever with additional revenue growth expected in future months. The Property was encumbered by a bridge loan nearing the end of its term and the Sponsor was looking to maximize proceeds to secure a cash-out refinance.

    CMBS lender appetite toward hotels has picked up since the pandemic and the hotel received multiple bids from lenders. The 10-year fixed rate loan represents a 65% loan to the appraised value. Most CMBS lenders underwrote the loan to a 12% debt yield but due to the successful advising process of George Smith Partners, the chosen Lender was able to close using a 10.75% debt yield on T-12 income. Having experienced a dip in revenue through the COVID-19 pandemic, underwriting this asset required additional diligence to truly understand the stabilized cash flow. The hotel was experiencing a ramp-up in demand as drive-to markets have been extremely well-traveled since the pandemic. GSP and the Sponsor timed the refinance so that the hotel generated strong cash flow and secured an attractive rate during a rising rate environment.

    Term: 10 Years
    LTV: 65%
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    Guarantee: Non-Recourse with Standard Carveouts
    Prepayment: Defeasance

  • 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

  • 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

  • $4,300,000 Refinance/Cash-Out of a Southern California 15 Key Motel

    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.

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  • $5,100,000 Refinance of a 66 key all-suite Best Western in Southern California

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    Rate: 10 YR Treasury + 214 (locked at Loan Application at a 4.49% coupon)
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    Loan to Value: 33%
    Lender Fee: 0.50%
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