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July 14, 2017  

JP Morgan Finances Dell's Maui Hotel

J.P. Morgan has originated a $600 million floater on the Four Seasons Resort Maui.

The bank will securitize the senior portion of the debt — about $450 million — in a stand-alone offering and place the balance separately as mezzanine debt. The borrower is billionaire Michael Dell’s MSD Capital, which arranged the loan via Eastdil Secured.

MSD will use most of the proceeds to retire a $525 million floating-rate debt package that Credit Suisse originated in 2014, when the 380-room hotel was appraised at $751 million. Credit Suisse securitized the $350 million senior portion via a stand-alone deal (CSMC 2014-TIKI) and separately placed the rest of the interest-only package — $95 million of senior mezzanine debt and $80 million of junior mezzanine debt.

According to a servicer report, the Wailea, Hawaii, hotel produced $44.3 million of net operating income last year, down from $53.3 million in 2015. The average occupancy rate was 80% last year.

The hotel is on a 16.2-acre site on Wailea Beach. The amenities include three restaurants, a lounge, a pool bar, 14,000 square feet of indoor meeting space, 21,000 sf of outdoor space, three swimming spools, a spa, a fitness center and retail shops.

New York-based MSD bought the Four Seasons in 2004 from Shimizu Land of Japan for $280 million. Three years later, Deutsche Bank securitized a $425 million mortgage on the property via two deals (GECMC 2007-C1 and CD 2007-CD4). That loan was modified in 2011 after the resort struggled during the recession. The property later rebounded, and the modified loan was refinanced in 2014 with Credit Suisse’s loan.