Who’s buying, selling and financing?

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Acquisition and financing deals continue across the country, including Pebblebrook’s $174 million purchase of a Newport, RI, resort.

Pebblebrook Hotel Trust acquires Gurney’s Newport Resort & Marina
Pebblebrook Hotel Trust has acquired the 257-room Gurney’s Newport Resort & Marina in Newport, RI, for $174 million.

Gurney’s Newport is a 10-acre waterside resort located on Goat Island. The independent property has 360-degree unobstructed water views of Narragansett Bay, as well as Newport Harbor and the Newport Bridge. The guestrooms include 18 suites, while the resort features 80,000 sq. ft. of flexible indoor and outdoor event space.

The resort contains a variety of waterside eateries, including Showfish Newport and The Pineapple Club. It also contains a 22-slip full-service marina with direct access to Gurney’s Newport. Additional resort amenities include a 3,000-sq.ft. spa with nine treatment rooms, outdoor fireplaces throughout, a lobby bar, a grab-and-go coffee shop, a 3,200-sq.ft. waterside pavilion, a resort-style saltwater outdoor pool with poolside cabanas, an indoor pool, a fitness center and a seasonal ice-skating rink.

“We are very excited to acquire this extremely unique premier resort within the vibrant, high barrier to entry Newport market,” said Jon E. Bortz, chairman/president/CEO, Pebblebrook Hotel Trust. “Gurney’s Newport is the only resort-style property in Newport, and it is one of the very few true waterside resorts on the Northeastern Seaboard, drawing strong demand from New York, Boston and Providence. This unique New England retreat features an expansive footprint overlooking Newport Harbor and Narragansett Bay, where guests can enjoy upscale dining, spa treatments, sailing tours, outdoor event spaces, a private marina, cabana experiences and numerous other resort-style amenities. With group and individual travelers increasingly seeking a unique resort experience with open-air amenities, Gurney’s Newport is well-positioned to continue to grow in the highly attractive Newport market.”

The company is evaluating numerous operating and physical enhancements to the guest experience to drive increased cash flow. Pebblebrook believes the overall opportunity is to reposition the property to a higher level, given its unique location and amenities. Potential improvements include fully renovating the guestrooms and guest bathrooms; upgrading the lobby, arrival experience and landscaping; refurbishing the restaurants and bars; adding a market; relocating/upgrading the spa; reimagining the Grand Ballroom, South Lawn and outdoor pavilion spaces; and adding new guest activities and amenities. In addition, the company has the right to purchase the marina in 2027. The resort will also become part of Curator Hotel & Resort Collection, which is expected to generate a wide array of expense reductions combined with enhanced technology and operating initiatives.

Based on the estimated May 2022 trailing-12-month performance, the hotel generated TRevPAR of $401, hotel EBITDA of $13.6 million and hotel NOI, after a 4% capital reserve, of $12.1 million.

The acquisition of Gurney’s Newport brings the total number of properties in the company’s portfolio to 55, including 13 drive-to, independent lifestyle resorts. Pebblebrook funded the acquisition with cash on hand and proceeds from its senior unsecured revolving credit facility.

Hall Structured Finance closes $40.5M construction loan for two California properties
Dallas-based HALL Structured Finance (HSF) has closed a new first lien construction loan totaling $40.5 million to finance the development of a 95-room Home2 Suites by Hilton and an adjacent 109-room Courtyard by Marriott in Woodland, CA. The two hotels are being developed and managed by Sacramento-based American Hospitality Services.

“This was a compelling hotel project for us to finance given the track record and performance of American Hospitality Services’ other hotels in this submarket, the background and experience of the sponsor, and the strong brand affiliation of each hotel,” said Donald Braun, president, HSF. “Upon completion, these new hotels will be the only upscale and extended-stay properties in Woodland and will satisfy the growing demand for more lodging options in one of fastest-growing regions in California.”

Containing 204 rooms, the two hotels will offer guests both extended-stay and select-service as options. The two hotels are located near Woodland’s historic downtown neighborhood, which features walkable restaurants, shops and annual festivals such as the California Honey Festival. Situated just outside Sacramento, the hotels will also be in close proximity to tourist destinations Napa Valley, Lake Tahoe and the Sierra Nevada Mountains.

Arriba Capital’s Ryan Bosch sourced the financing for the project. “The sponsors are experienced hotel developers with a deep track record in Northern California,” he said. “Getting these properties financed in today’s challenging capital markets environment is a testament to the strength of the project, sponsorship and execution by the team at HSF. We are looking forward to these projects successfully competing against the outdated competitors in the region.”

Knighthead Funding provides $37.6M refinance for Nashville hotel
Knighthead Funding LLC has provided a $37.6 million first mortgage loan to refinance the 204-key Marriott TownePlace Suites hotel in downtown Nashville. The five-year, non-recourse loan refinances the in-place construction loan.

Opened in October 2020, the hotel is one of Marriott’s newest extended-stay, all-suite hotels in the market, featuring an amenity package that includes a rooftop bar, a fitness center and a 1,080-sq.ft. coffee shop.

Knighthead VP Peter Illuzi originated the loan.

Huff, Niehaus closes sale of Comfort Suites Airport Louisville
Huff, Niehaus & Associates Inc. has closed the sale of the Comfort Suites Airport Louisville in Louisville, KY.

Brandt Niehaus, president, Huff, Niehaus & Associates Inc., was the broker in the transaction. The 81-room hotel is located in close proximity to Muhammad Ali International Airport. The airport market has historically been one of the stronger markets in the area, the company reports. The asset was sold to a buyer with several Choice hotels who will use a third-party management company to operate this Comfort Suites hotel.