PCCP Provides $73M in Senior Loans to Three Properties
By Nicholas Ziegler, News Editor
PCCP L.L.C. has provided a $46 million senior loan to KHP Fund II L.P., a real estate private equity fund sponsored by Kimpton Hotels & Restaurants, to finance the repositioning of two hotels. The hotels include the 202-room Hotel Monaco Baltimore and the 183-room Hotel Palomar San Diego.
Additionally, the firm provided a $27.4 million senior loan to refinance Millbrae Paradise, a residential condominium and retail development in Millbrae, Calif., on behalf of the developer and owner, San Francisco-based LF George Properties. The senior loan will be used to refinance 59 completed Class A condominium units and 20,000 square feet of first and second floor retail space that is 80 percent occupied.
Kimpton purchased the Hotel Palomar San Diego out of bankruptcy in June 2011. Located in downtown San Diego near the Gaslamp district, the Palomar property includes 14,300 square feet of meeting space, a 5,500 square foot spa, an outdoor pool with a 7,000 square foot deck, an adjacent 31,300 square foot restaurant property occupied by House of Blues, as well as a recently re-concepted Saltbox Dining & Drinking restaurant. The prior developer restored and converted the historic building into a luxury boutique hotel which opened in 2009.
“Kimpton made two separate complicated acquisitions in distressed situations and our loan will facilitate the turn-around of the two assets,” Rob Cohen, senior vice president with PCCP, said. “Both hotels are among the highest quality in their respective markets but have under-performed in the last two years.”
The Millbrae Paradise project, located one mile from the San Francisco International Airport, started construction in 2008 and was completed in late 2010. It offers multiple amenities to residents, including a 2,000-square-foot fitness center and a large center courtyard.
“Due to the quality of the product and the tightness of the San Francisco Bay Area market, particularly peninsula locations between San Francisco and San Jose, this project has performed very well over the past 15 months since opening,” Jim Galovan, a vice president with PCCP, said. “We believe that this attractive, Class A property with very little nearby competition will continue to capture its share of the Bay Area for-sale market.”