Financing deals abound

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September 1, 2022

A flurry of financing deals have closed recently, including Hall Structured Finance (HSF) providing $54 million in loans for two projects.

HSF originates loans for two projects
HSF has originated $54 million in loans for two separate construction projects.

The company has originated a new first lien construction loan totaling $38.7 million to finance the development of the ROOST Apartment Hotel located in Charleston, SC. The extended-stay, boutique apartment hotel will be operated by Philadelphia-based Method Co., a real estate management, development and design company rooted in hospitality. The property is scheduled to open in early 2024.

“This apartment hotel presented an exciting opportunity to provide financing for a unique hotel experience that will blend a luxury boutique setting with an extended-stay lodging offering,” said Donald Braun, president, HSF. “We believe that this hotel will be a great addition to the Charleston Historic District, one of the nation’s most coveted tourism destinations.”

The 50-room, five-story luxury boutique apartment hotel is designed by Morris Adjmi Architects.

“We are thrilled to break ground on our first ROOST Apartment Hotel in South Carolina and our second project in the city of Charleston,” said David Grasso, president/cofounder, Method Co. “ROOST will offer guests in Charleston a comfortable stay in a beautifully designed apartment that feels like a home and the flexibility to stay a few nights or a few months. The building’s design by Morris Adjmi Architects is outstanding; it will be a fitting compliment to the classic architectural charm of Charleston.”

The new property will consist of 52,700 sq. ft. of space comprising a mix of studio, one-, two- and three-bedroom apartment hotel units, a rooftop lounge overlooking downtown Charleston and 27,700 sq. ft. of rentable space. The apartment hotel units are designed with high-end finishing with nine-ft. ceilings and open floor plans with artwork, live plants, Bluetooth stereos, fully equipped kitchens and in-unit washer and dryers. Amenities will include two prime street-level retail outlets, an open-air courtyard, a fitness center, library, breakfast bar, business center and complimentary bicycles for exploring the city. Method Co. will also operate the property’s rooftop lounge, drawing on significant experience in food and beverage operations to create a space that serves both as an amenity to guests and locals.

Andrew Healy, VP, CBRE, sourced the financing for the project.

The company has also originated a new first lien construction loan totaling $15.3 million to finance the development of a Hampton Inn & Suites in Shenandoah, TX. The hotel is being developed and managed by Texas-based K & K Hotel Group and is projected to open in late 2023.

“The Woodlands and neighboring cities such as Shenandoah and Oak Ridge North, have enjoyed unprecedented population and employment growth in recent years,” said Matt Mitchell, VP, HSF. “We believe the hotel’s prime location along Interstate-45 and the popularity of Hilton’s Hampton Inn brand coupled with the area’s robust business climate will make it a great addition for the growing number of business and leisure travelers to the area.”

The five-story hotel will be located one mile north of The Woodlands Town Center, which serves as the downtown for the area. The Woodlands is a 28,800-acre master-planned community that is home to more than 118,000 residents and approximately 2,200 businesses. Located within the greater Houston market, the hotel will provide guests with access to four hospitals, a major airport, various corporate campuses and office parks, and many other Class A mixed-use developments, restaurants and entertainment venues. The 106-room hotel will feature more than 1,000 sq. ft. of meeting space, a fitness center, lobby workstation, laundry room, a dining area with a full bar and an outdoor pool.

Mag Mile Capital closes $63M loan for A&R Hospitality
Rushi Shah, CEO, and Prabhat Jayara, VP of underwriting & originations for Mag Mile Capital recently arranged a $63-million CMBS loan on behalf of their client—A&R Hospitality—for the purpose of refinancing a portfolio of nine limited/select and extended-stay hotels, which featured a large amount of cash out proceeds.

The hotels are primarily located in the Gulf Coast region of Alabama and Florida (also known as ‘Florabama region’) in the cities of Gulf Shores, AL; Mobile, AL; Daphne, AL; and Pensacola, FL.

“The borrower is an established client of ours, and we have completed multiple transactions for them over the years,” said Shah. “This portfolio is especially attractive because it is made up of mostly Gulf Shores, AL assets with one asset being in Orange Beach, AL—many of which sit close to the beach. Known colloquially as the Redneck Riviera, these locations are celebrated for beautiful beaches, great hospitality and summers filled with music festivals. A couple of the assets in the subject portfolio sit in the Pensacola region—a growing real estate market that boasts great fishing and golf excursions, beautiful scenery and the largest artificial reef in the U.S. This was a fantastic execution, and we were very happy to assist a valued client in the consummation of their business plan.”

The transaction provided A&R Hospitality with a cash-out of their significant imputed equity in the portfolio. A&R will leverage the cash-out proceeds realized as a result of this execution to recapitalize the equity from its assets and to serve as a key driver for its roll-up strategy to launch its own LP-GP fund.

“Rushi Shah and Mag Mile Capital used their vast network of relationships to put together a syndicate of three powerhouse lenders: Société Générale, Bank of Montreal, and Goldman Sachs,” said Ken Patel, CEO, A&R Hospitality. “This created strong demand for the loan in the secondary market. Markets were volatile during the loan closing process, however, Mag Mile Capital maneuvered through the volatility and handled new information swiftly to bring a favorable outcome to the transaction.”

“The cash out proceeds will allow us to scale our roll-up strategy for a newly formed fund, where we will raise additional LP capital to add assets to our portfolio,” said Zach Hoyt, president, development, A&R Group. “This transaction allows us to deepen our relationship with Mag Mile Capital as we continue to look to grow our portfolio.”

Newmark secures $235M financing loan for Stanly Ranch
On behalf of Mandrake Capital Partners and Nichols Partnership, Newmark arranged the financing of Stanly Ranch, Auberge Resorts Collection, a flagship luxury resort in Napa Valley, CA, which opened in April.

The Newmark team was led by Jordan Roeschlaub and Dustin Stolly, vice chairmen and co-heads of the debt & structured Finance team, along with Senior Managing Director Nick Scribani. Mack provided the $235-million loan.

Stanly Ranch is set on 712 acres of vineyards and ranch land and features 135 cottage-style hotel suites. The property has three dining outlets, a range of private event spaces, 22,000 sq. ft. of meeting/conference space, an 18,000-sq.-ft. spa with 12 treatment rooms, two outdoor pools, a kid’s pool, bocce ball courts and a fitness center. The financing also capitalized on constructing the resort’s 40 for-sale residential villas along the property’s hillside, commanding exceptional views.

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