NATIONAL REPORT—Several hoteliers were able to get deals done recently, thanks to financing approvals. In California, Dallas-based Hall Structured Finance (HSF) closed a new first-lien construction loan totaling $55 million to finance the construction of a 150-room Hyatt Andaz resort hotel and accompanying retail in Palm Springs.
Rael Development Corp. is the project developer and SR Construction is the project’s general contractor. The project is expected to open in 2019.
“The Andaz Palm Springs presented us with the opportunity to finance what will be one of the finest hotels in the Coachella Valley once completed,” said Mike Jaynes, president of HSF. “Hyatt’s Andaz brand is a high-quality, boutique-inspired lifestyle hotel that will be a perfect match for the Palm Springs market.”
The Andaz Palm Springs is designed as a collection of small buildings and guestroom bungalows surrounding two outdoor pools, garden, lounge areas and walking paths. The hotel will be situated on an elevated second-floor deck offering views of the San Jacinto Mountains and the City of Palm Springs.
Additional amenities will include indoor and outdoor bars and lounges, a spa, a fitness center and 6,000 sq. ft. of banquet and meeting space.
The 30,000-sq.-ft. street-level retail portion of the project, The Shops on Palm Canyon, will be leased to a mix of restaurants, clothing shops, boutiques and galleries, which will complement the shopping and dining corridor along Palm Canyon Drive within Palm Spring’s downtown and uptown Design Districts.
“We are designing and constructing this project to be one of the highest quality resorts in the region,” added Lawrence Rael, co-owner of Rael Development Corp.
This is the fourth construction loan HSF has closed in California this year, having recently closed a $26-million construction loan for the Park James Hotel in Menlo Park and a $42-million loan to develop two Cambria Suites in Napa Valley and Sonoma County.
In the Southeast, Holliday Fenoglio Fowler LP (HFF) arranged an $18.72-million construction and redevelopment financing for a 191-room, upscale, select-service hotel that will serve as a hotel for the 2017 World Champion Houston Astros players, staff and family near the Astros’ spring training facility in West Palm Beach, FL. The hotel will be open to the public as well.
The HFF team worked on behalf of the borrower, a partnership between Crane Capital Group Inc. and Westmont Hospitality Group, to place the three-year, fixed-rate loan with Woodforest National Bank.
Loan proceeds will be used to convert the vacant Forum Office tower at 1675 Palm Beach Lakes Blvd., which the borrower acquired in early 2017. The property is located five miles from the new $150-million Houston Astros spring training facility and The Ballpark of the Palm Beaches, which also is the spring training facility for the Washington Nationals. Additionally, the hotel is adjacent the Palm Beach Outlets Mall and proximate to downtown and beaches.
The redeveloped 10-story hotel will feature a complete amenity package, including a restaurant, pool and gym.
Westmont Hospitality Group will manage the property when it opens next year.
The HFF debt placement team included Senior Director Scott Wadler and analyst Wesley Hightower.
“[Chairman] Jim Crane and the entire Houston Astros organization are looking forward to deepening our involvement in West Palm Beach,” said Astros SVP and General Counsel Giles Kibbe. “After a successful inaugural season at The Ballpark of the Palm Beaches, we have been excited to explore new opportunities in the area. This new hotel will bring the excitement of the 2017 World Series Championship to Florida, serve as an excellent home for our players and staff during spring training, and will be enjoyed by the public throughout the year.”
$10 Million Arranged
Cronheim Hotel Capital (CHC) arranged cash-out financing of $10 million for the Holiday Inn Express in Camp Springs, MD. The loan was placed with a national lender and offered a 10-year term and 30-year amortization. The rate was locked at 4.54%.
The 126-key property opened in 1988 on the DC Beltway near Andrews Air Force Base and a few miles east of National Harbor. The borrower acquired the property in 2015 and completed an extensive $15,900 per key renovation while driving operating efficiency through hands-on management, according to the company.