Ritz-Carlton, Denver Refinanced with $51M Loan
- Nov 20, 2013
There’s nothing like a premier property to reel in lenders. The Ritz-Carlton, Denver, the Mile-High City’s only AAA Five Diamond-rated hotel, has just been refinanced, courtesy of a $51 million loan. Pearlmark Real Estate Partners, owner of the 202-room luxury hotel, relied on commercial real estate and capital markets services provider HFF to arrange the financing, which was originated jointly by Annaly Commercial Real Estate Group Inc. and Principal Real Estate Investors.
Simply put, Eric Tupler, senior managing director with HFF, told Commercial Property Executive, “Lender interest was very high.” And for good reason.
It certainly has prominence on its side and it also benefits from the all-important location factor. Sited on a half-acre downtown parcel at 1881 Citrus St., the Ritz-Carlton claims the first 14 floors of a 37-story mixed-use tower that also features the Apartments at Denver Place and the Residence XXV condominiums. Only the hotel segment, which made its debut as a Ritz-Carlton property in 2008, was up for refinancing, which came in the form of a three-year floating rate loan.
“Given the Ritz-Carlton brand and what’s going on in Denver, overall lender interest was extremely high,” Tupler said. And there’s a lot going on in Denver. “We’re seeing good job growth, continued strong in-migration and we’re seeing other asset classes trading at values that we’ve never experienced in Denver before,” he added. “We’re also seeing a very strong convention business with our Convention Center, and all of that is just driving huge demand, especially in the downtown market of Denver.”
Denver’s Ritz-Carlton has the right recipe for attracting financing in the current market–a high-quality property with a solid sponsor, a successful track record and a good location. But the hotel sector in general, while still trailing the multi-family sector as a lender favorite, has certainly moved up on the interest meter.
“I think overall, lenders have gotten much more comfortable with the long-term sustainability of the hospitality market nationally,” Tupler added. “We’re seeing improved ADR and occupancy levels across the country. It does sometimes get market-by-market specific, but lenders overall are very active in lending. They’re looking to further balance their investments and hospitality is a component that most lenders were not active in over the previous five years and as a result, we’re seeing a significant increase in the capital source available for hospitality.”