Coachella Valley Resort Lands $212M Financing
- Jan 17, 2019
The Robert Green Co. is moving forward with development of the master-planned SilverRock Resort and Residences mixed-use development in La Quinta, Calif., thanks to $212.3 million in construction financing. The 145-acre first phase will include two luxury hotels.
The three-year senior construction loan from an affiliate of Mosaic Real Estate Investors, arranged by George Smith Partners, will be used to fund the predevelopment and construction costs of a 140-key Montage Resort, a 200-key Pendry Resort, 10 luxury golf villas, a shared service and conference facility and a golf clubhouse. The Montage and Pendry resorts, two hotel and resort brands within Montage International, are expected to open in 2020.
The SilverRock Resort, located in the Coachella Valley, already has a fully completed and world-renowned Arnold Palmer Signature Design golf course.
“As Coachella and other desert festivals increase in popularity, there is tremendous growing demand for high-level hospitality product, making this new resort and luxury living community the highest and best use for this initial 145-acre land parcel,” Malcolm Davies, George Smith Partners principal & managing director, said in a prepared statement.
Davies noted that the financing process required a deep collaboration of multiple entities and extensive understanding of the market, which has been undergoing a tourism boom in recent years but lacks enough hotel rooms to meet the demand.
“This project encompasses a tremendous amount of complexity and required a financing strategy with exceptional fortitude and flexibility,” he said. “Our team worked closely with the developer to identify the right financing partner, and to structure the financing in a way that was extremely accretive to the developer’s underwriting.”
Robert Green, founder of The Robert Green Co., an Encinitas, Calif.-based company that specializes in luxury hospitality and mixed-used development throughout the Western U.S., noted the Coachella Valley region attracted 12.9 million visitors in the past year. The region expects a 30 percent increase in visitors over the next eight years.
“We immediately recognized the substantial value this development will bring to the Coachella Valley,” Green said in a prepared statement. “This is simply the perfect time to bring a project of this magnitude to the region. The existing golf course, a PGA tour caliber facility, is a tremendous asset when looking at this development from a macro perspective.”
Ethan Penner, managing partner & CIO of Mosaic Real Estate Investors, also pointed to the tourism metrics that are improving in the region. “This investment is well-aligned with our dedication to identify and invest in properties that fill unmet needs in the capital markets,” Penner said in prepared remarks. “Coachella Valley has quickly become a top tourist destination and we are confident in the long-term fundamentals of this project.”
In July, George Smith Partners arranged $32.4 million in financing for another Coachella hospitality project—the development of an IHG Hotel Indigo, a 35-acre casita-style resort in Coachella, Calif. The 250-key resort will be the closest property to the Empire Polo Club, the site of several music festivals held annually in the area. The project, which included a 13,000-square-foot convention center, secured a $24.4 million senior construction loan and $8 million PACE funding, making it the first hotel project in California to receive PACE financing.
The Coachella development is not the first time The Robert Green Co. has worked with Montage Hotels & Resorts. Last January, the firms unveiled plans for Montage Healdsburg, a 130-key resort in the Northern California wine country community of Healdsburg.
In Oct 2017, George Smith arranged financing for another Montage and Pendry development—the San Diego Pendry Hotel, a 317-key luxury hotel near the San Diego Convention Center and Petco Park. The firm secured an $85 million bridge loan to repay the construction loan.
Mosaic has also been active in the hospitality market, providing a $50.9 million construction loan in December for Oceans V to convert a Los Angeles-based office building into a 180-key Cambria Hotel & Suites.
Images courtesy of George Smith Partners