Tuesday July 22nd, 2014 - 10:31AM
NEW YORK—DiamondRock Hospitality Company has entered into a new $86-million mortgage loan secured by the Courtyard New York Manhattan / Midtown East located here.
The new loan matures in 2024 and bears interest at a fixed rate of 4.40%. The new loan is interest-only for the first two years, after which principal will amortize over 30 years. The hotel was previously encumbered by a $41.3-million mortgage loan bearing interest at 8.81%.
"We are pleased to take advantage of the current low interest rate environment by locking into a 4.40% interest rate for 10 years. Further, loan proceeds are approximately 10% higher than our total investment in the hotel and the loan will achieve our strategic objective of further laddering our debt maturities," said Sean Mahoney, EVP and CFO of the company.
DiamondRock Hospitality Company used proceeds from the new loan to fully repay the $41.3-million outstanding on the existing mortgage loan. The remaining excess proceeds will be used to build capacity for future opportunistic investments. After the completion of this loan, 11 of the company's 25 hotels remain unencumbered by property-specific mortgage debt. The refinancing lowered the company's weighted average interest rate by approximately 20 basis points to 4.98%.