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September 06, 2019  

BofA, Wells Financing New Hotel in Austin

Bank of America is leading a $425 million floating-rate debt package on the Fairmont Austin, which opened last year.

BofA was expected to fund $325 million of the balance yesterday, with Wells Fargo kicking in the rest. The plan is to securitize all or most of the loan via a stand-alone offering.

The 1,048-room hotel, at 101 Red River Street, was developed by a joint venture between Manchester Financial of San Diego and Colony Capital of Los Angeles. Berkadia’s hotel and hospitality unit brokered the mortgage, which has a two-year term and three one-year extension options.

The leverage was described as around 70%, putting the property’s value at just over $600 million. The Manchester team lined up the loan to pay off construction debt.

The 37-story property, which opened in March 2018, is at East Cesar Chavez Street, just off Interstate 35 on the edge of downtown Austin. It connects to the Austin Convention Center and features 140,000 square feet of meeting space, a heated pool with cabanas, a spa and five restaurants and bars.

Andy Coleman, a senior managing director in Berkadia’s hospitality brokerage practice, said that major new hotels in solid markets are generally performing well, enabling developers to quickly refinance construction debt. “We’re seeing a lot of assets get done early,” he said.