Hotel Lender Hawks Big Mortgage Portfolio
A lender specializing in hotel properties is looking to sell $325 million of performing and nonperforming mortgages.
The 40 loans, originated by Access Point Financial of Atlanta, are backed by select-service hotels encompassing almost 6,000 rooms in 22 states. About half of the loans, by dollar volume, are still performing. Around 75% of the outstanding balance is pegged to fixed-rate coupons, while the rest of the loans are floaters.
In putting the seasoned portfolio up for grabs via Newmark this week, Access Point joined a growing field of lenders seeking to shed loans they originated before the pandemic disrupted the market (see article on Page 2). Also this week, Bayview Asset Management of Coral Gables, Fla., began shopping $433 million of performing commercial mortgages on a variety of property types across the U.S.
While the specific motivations of Access Point and Bayview are unclear, many lenders offering mortgages want to re-deploy capital opportunistically. Others are trying to raise cash to shore up their liquidity amid the widespread economic fallout and financial-market disruptions stemming from the public-health crisis.
Most, if not all, of the loans offered by Access Point are tied to transitional properties or construction projects. Many of the borrowers are struggling to make payments and move forward with their business plans because the hotel sector has been particularly hard-hit by pandemic-related restrictions on travel and public gatherings over the last two months.
The two largest loans in the pool, each totaling about $18 million, are collateralized by the 162-room Radisson Hotel Northwest in Oklahoma City and the 152-room Garfield Suites hotel in Cincinnati. The next-largest is a roughly $12 million loan on a 262-room hotel in Joplin, Mo., formerly branded as a Holiday Inn Express, that’s slated to become a 185-room DoubleTree by Hilton.
Access Point offers financing to franchisees of major hotel brands as well as boutique operators. A year ago, the company was laying the groundwork for its first securitization of hotel loans. But its plan to float a commercial real estate CLO never materialized.
Led by chief executive Dilip Petigara, Access Point formed in 2011 with backing from private equity shop Stone Point Capital of Greenwich, Conn. In a $350 million recapitalization in 2017, Stone Point sold its interest to a joint venture between private equity firms Wafra Capital of New York and NBK Capital of Dubai.
Access Point’s loans are serviced by Trimont Real Estate of Atlanta.