Summary: Continental Partners successfully arranged the $50,000,000 refinance of the Embassy Suites Hotel. The Sponsor requested a fixed-rate, non-recourse loan to refinance the existing bridge loan and provide substantial cash out proceeds. The Embassy Suites Glendale is a 272-room, 12-story, full service hotel located in Glendale, California. The Property was built in 2008 by the Sponsor and at the time was the newest property in the hotel’s competitive set. Amenities at the hotel include a fitness center, outdoor swimming pool, business center, and guest laundry, approximately 7,000 SF of meeting space, gift shop, restaurant and lounge.
Opportunity: A number of Lenders who quoted the transaction were coming up with a loan amount that did not meet the Sponsor’s requirements for cash out. Continental Partners approached a number of Lenders including banks, CMBS lenders and life insurance companies. Most of the Lenders were sizing to debt yields around 11% and were skeptical of the Sponsor’s underwriting based on the 12 months of historical operating statements and the quick ramp up in NOI.
Result: Continental Partners was able to find a Lender who understood the asset, the market and the Sponsor’s business plan. The Lender lowered their debt yield below 10% allowing for a loan amount to replace the existing bridge loan and provided enough cash out to meet the Sponsor’s requirements. Continental Partners completed a methodical market survey using the STR report to confirm the market occupancy, daily rates and ADR’s for the comp set. Based on the Continental Partners survey, the Lender was able to get comfortable with the deal and committed to a larger loan amount than originally requested.