Strategic Hotels’ Refi Frenzy Continues with $130M Loan on Four Seasons D.C.

Strategic just closed a $130 million limited-recourse loan secured by the premier 222-room property in D.C.'s upscale Georgetown neighborhood.

July 22, 2011
By Barbra Murray, Contributing Editor

With lenders feeling warm and fuzzy toward Strategic Hotels & Resorts, the lodging REIT is wasting precious little time refinancing assets, including the Four Seasons Hotel Washington, D.C. Strategic just closed a $130 million limited-recourse loan secured by the premier 222-room property in the city’s upscale Georgetown neighborhood.

Eastdil Secured acted as placement agent and Deutsche Bank Securities Inc. provided a three-year loan that features a floating rate and two one-year extension options. The financing releases the hotel, which Strategic acquired for $168.9 million in 2006, from serving as collateral for the REIT’s revolving credit facility and provides significant proceeds. It’s all part of the plan — the debt-staggering plan.

Strategic’s Jonathan Stanner, treasurer and vice president of capital markets, told Commercial Property Executive all about it following the company’s July 15 announcement of the refinancing of Loews Santa Monica Beach Hotel with a $110 million limited-recourse loan. “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,” he said. While the credit market is becoming more receptive to borrowers, not every company can close financing deal after financing deal, but Strategic can.

“Since the first of the year, we have restructured two loans, refinanced three loans and closed a whole new line of credit, so we have clearly been active,” Diane Morefield, CFO of Strategic, told CPE. “The market is very open when you have high quality hotels. Those types of loans are considered favorable, and sponsorship is important. The fact that Strategic Hotels is the owner has helped us achieve very attractive pricing terms as well as overall structuring on all the loans.”