Loews Universal Gets Boost from MetLife
- Jul 24, 2015
By Gail Kalinoski, Contributing Editor
MetLife, Inc. has provided a $505 million loan to an investors group comprised of Loews Hotels & Resorts, NBCUniversal and Hard Rock International to refinance three luxury hotels at Universal Orlando Resort in Florida.
The fixed-rate loan, which was used to refinance existing debt, has a term of 10 years. It is secured by the three AAA four-diamond resort hotels and a central support facility all located at Universal Orlando Resort. The hotels, which have a total of 2,400 keys and more than 180,000 square feet of conference space, are the Loews Portofino Bay Hotel at Universal Orlando, Hard Rock Hotel and Loews Royal Pacific Resort at Orlando.
“These are proven properties in a major market for MetLife,” Robert Merck, senior managing director & global head of real estate for MetLife, said in a prepared statement. “The ownership group has proven hotel expertise, considerable financial strength and demonstrated commitment to capital reinvestment.”
The oldest of the three hotels is Loews Portofino Bay Hotel at Universal Orlando, which opened in September 1999. The hotel with 750 keys had a $22 million renovation that was completed in 2014.
Hard Rock Hotel, with 650 keys, opened in 2000. Guest room and lobby renovations were completed earlier this year. The cost for the improvements was not available.
The 1,000-key Loews Royal Pacific Resort at Universal Orlando opened in June 2002 and underwent a $10 million renovation in 2007.
They are the original three hotels built at the Universal Orlando resort. The newest entry is Cabana Bay Beach Resort and a fifth, Loews Sapphire Falls Resort, is scheduled to open in summer 2016. It will have 1,000 keys, including 77 suites, and expand the on-site hotel offerings to 5,200 rooms.
Commercial real estate loans are just one part of MetLife’s real estate platform, which also include equity investments, and focus on income-producing properties in strong markets. Last year, MetLife originated approximately $12.1 billion in commercial mortgage loans, a 5 percent increase over the $11.5 billion originated in 2013. The life insurance company invested approximately $1.7 billion in real estate equity in 2014, either through direct acquisition or joint ventures. In December, it acquired the Fairmont Hotel in Washington, D.C., for $180 million. Other MetLife-owned hotel properties include The Ritz-Carlton San Francisco, which it bought in a joint venture in 2013 with Thayer Lodging Group. In Orlando, it owns part of the Swan and Dolphin hotels at the Walt Disney World Resort.
Earlier this year, MetLife Real Estate Investors, Inc., the third-party investment management arm of MetLife, received a mandate from a reinsurance company to invest $500 million in commercial real estate loans throughout the United States. Under the mandate from the unnamed reinsurer, MetLife REI will originate and service variable and fixed-rate loans across various property types through a separately managed account.