Strategic Hotels Closes $120M Refi of Loews Santa Monica
- Jul 18, 2011
July 18, 2011
By Barbra Murray, Contributing Editor
Strategic Hotels & Resorts Inc. continues to stagger maturities on its balance sheet with the refinancing of the Loews Santa Monica Beach Hotel, a 342-room destination along the Pacific Ocean on Los Angeles County’s West Side. The limited recourse loan takes the place of a previous $118.3 million debt on the upscale property.
With Eastdil Secured serving as placement agent, Wells Fargo Bank N.A. provided the new four-year financing, which allows for three one-year extensions. The previous debt had been due to mature in March 2012.
Strategic’s refinancing of the 22-year-old Loews Santa Monica, which it has owned since 1998, is part of the hotel and resort REIT’s current accelerated hotel-refinancing strategy. “Our goal is to have no more than 25 to 30 percent of maturities in any one year to mitigate any downturn in the capital markets,” Jonathan Stanner, treasurer and vice president of capital markets, told Commercial Property Executive. In July, the company secured an $85 million mortgage loan on the InterContinental Miami from Aareal Capital Corp., replacing $90 million in previous financing.
“There are a couple [deals] we’re in the process of doing,” Stanner said. “We’ve been proactive in going out and allocating refinancings given how strong the capital markets have become.”
Strategic has solid sponsorship on its side and its successful, high-quality assets certainly do not hurt when it comes to attracting the attention of banks. “Lenders are underwriting sponsors but the attractiveness of an asset is key form their perspective,” Stanner said. Loews Santa Monica’s average occupancy level in 2010 was an impressive 87 percent and the property’s revenue per available room jumped 16.1 percent, year-over-year.