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CMA
September 29, 2017  

Lenders Compete to Refinance Orlando Hotel

The owners of the Hilton Orlando resort are close to lining up a mortgage of some $475 million.

The 1,417-room hotel is owned by a joint venture among Ares Management of Los Angeles, RIDA Development of Houston and Park Hotels & Resorts of McLean, Va. The group is shopping for floating-rate debt with a term of five years. Eastdil Secured has been pitching the proposal to a variety of lenders over the past few weeks.

The partners are expected to choose a lender or lending group soon. One source said commercial MBS shops have been chasing the assignment most aggressively. The debt could be divided into a senior mortgage and a mezzanine component. While the structure is still fluid, the word is the junior piece could weigh in around $75 million.

The bulk of the proceeds would be used to extinguish a $375 million floater originated in 2014 by UBS and Wells Fargo. The banks securitized the senior $345 million piece in a stand-alone offering (HILT 2014-ORL). The senior mortgage is priced at 201 bp over Libor, and the mezzanine debt at Libor plus 625 bp. The package had a two-year term with five one-year extension options, and two of those have been exercised, according to a servicer report.

The upscale hotel was developed in 2009 by Ares, RIDA and Hilton Worldwide, which this year spun off its property holdings into Park Hotels, a public REIT.

The hotel is at 6001 Destination Parkway, next to the Orange County Convention Center and about 13 miles west of Orlando International Airport. The surrounding area includes a number of high-volume tourist destinations, including Walt Disney World Resort, SeaWorld Orlando and Universal Orlando Resort.

The property’s amenities include two swimming pools with a lazy river and water slide, private rental cabanas, a nine-hole putting green, a tennis court, a fitness center and several restaurants and bars.