Deutsche, Apollo, Macquarie Land Hotel Deal
Deutsche Bank, Apollo Global Real Estate and Macquarie have agreed to provide $425 million of financing on three high-end hotels owned by a Goldman Sachs joint venture.
The floating-rate debt package, on track to close in July, will have a two-year term, with three one-year extension options. Deutsche is expected to securitize the senior $300 million portion via a pooled offering. Apollo and Macquarie will each fund half of the mezzanine portion.
The properties, which encompass 3,975 rooms, are owned by a joint venture between Goldman’s Whitehall Street Global Real Estate operation and Chartres Lodging of San Francisco. They were among five hotels with the Adam’s Mark brand that the Whitehall team acquired in 2008 from HBE Corp. of St. Louis for close to $500 million. As part of the transaction, HBE provided $125 million of preferred equity, which remains in place. The Whitehall partnership then undertook major renovations and rebranded the properties.
The hotels being financed are the 1,840-room Sheraton Dallas, the 1,225-room Sheraton Denver and the 910-room Hyatt Regency St. Louis. Some $220 million was earmarked for the renovations to the three properties.
The debt-financing package, arranged by Eastdil Secured, carries a 30-year amortization schedule. The loan-to-value ratio is about 55%, pegging the value of the three hotels at about $770 million.
The mezzanine pieces are of equal seniority. New York-based Apollo is acting on behalf of a separate account it manages.
With the transaction, Macquarie is making a splash in the mezzanine-loan market. The Australian financial-services firm launched a U.S. commercial mortgage and commercial MBS platform in mid-2010 under the direction of veteran CMBS executive Randy Reiff. Macquarie acquired Reiff’s company, Spartan Real Estate Capital of New York, and used it as the basis for the platform. The loan to the Whitehall partnership will be the largest mezzanine financing so far by Macquarie.