Pacifica Hotel Portfolio Gets a Financial Boost
- Sep 14, 2015
By Barbra Murray, Contributing Editor
Sonnenblick-Eichner Co. knows how to reel in the big bucks for its clients. The real estate investment banking firm recently arranged a $153.2 million loan package for Pacifica Hotels’ refinancing of a 10-property portfolio.
The 739-key collection encompasses 10 premier boutique hotels along the coast of California and in Florida. The portfolio includes six Central California hotels: Fireside Inn on Moonstone Beach, FogCatcher Inn and Pelican Inn & Suites, in Cambria; as well as Cottage Inn by the Sea, Sandcastle Inn and Spyglass Inn in Pismo Beach. And then there’s the Los Angeles-area segment of the portfolio, featuring Inn at Venice Beach in Venice Beach, Inn at Marina del Rey in Marina del Rey, and The Belamar Hotel in Manhattan Beach. The Florida property, Hilton Garden Inn at PGA Village in Port St. Lucie, rounds out the group.
With the assistance of Sonnenblick-Eichner, Pacifica had many an option from which to choose for its financing needs, particularly given that there was a lot for lenders to love. Elliot Eichner, principal with Sonnenblick-Eichner, told Commercial Property Executive, “Factors that attracted lenders to this financing included the excellent locations primarily along the Pacific Ocean, long and established historical cash flows, the recent renovation of some of the properties and experienced sponsors who have owned the properties over a long period of time”
Pacifica ultimately went with a CMBS execution, securing 10-year, fixed-rate first mortgage financing in the form of non-recourse and non-cross-collateralized loans. The package had its advantages for Pacifica’s refinancing of a group of loans in advance of maturity. “The cost of prepayment was mitigated by the lower cost of capital and the risk associated with the potential of higher interest rates in the future,” Eichner said in a press release. “The borrower also realized pent-up equity they had in the portfolio.”
Executing the transaction was like old times; Sonnenblick-Eichner had previously arranged the now-refinanced loans on Pacifica’s behalf.