CHICAGO—Strategic Hotels & Resorts, Inc. and its joint-venture partner have closed a $225-million limited-recourse loan secured by the JW Marriott Essex House hotel. The new financing replaces the $185.8 million financing previously encumbering the property.
Under the terms of the loan agreement, the loan bears interest at a floating rate of LIBOR plus 295 basis points, and has a three-year initial term with two one-year extension options available to the venture upon satisfying certain financial and other conditions.
The loan will be interest only and save the venture $4.8 million in annual principal amortization payments, which were scheduled to begin in 2015 under the previous agreement.
Upon closing the transaction, $25 million of cash held by the previous lender in a restricted cash account was released to the venture.
Metropolitan Life Insurance Company originated the financing.