RANCHO PALOS VERDES, CALIF. — A joint venture between Lowe Enterprises and JC Resorts has secured a $220 million first mortgage loan for the refinancing of Terranea Resort, a 582-room oceanfront hotel in Rancho Palos Verdes.
The new loan, which was provided by a client of Cornerstone Real Estate Advisers, was secured before existing loans were due to mature and replaces all previous loans on the property. Eastdil Secured brokered the transaction.
Terranea Resort is located on 102 acres of coastline, about 30 miles south of Los Angeles. Lowe Enterprises developed the property, which is owned by a joint venture of Lowe and JC Resorts.
In addition to the 400-room hotel and oceanfront bungalows, Terranea offers ownership in 32 private ocean villas and 50 ocean casitas, ranging from 1,850 square feet to 2,800 square feet.
“Terranea is truly a one-of-a-kind property that has become a favored destination for leisure and business travelers, groups and the local community,” says Robert Lowe Jr., co-president of Lowe Enterprises. “Cornerstone understands Terranea’s operating model and was able to be flexible in loan terms to allow us to optimize the resort’s performance.”
“Terranea brought Cornerstone an opportunity to provide our client with a significant investment collateralized by a resort that demonstrates ramping performance, robust group bookings and high-quality facilities and amenities,” says Jamie Henderson, managing director of Cornerstone’s alternative investments group.
The resort opened in May 2009. Gross revenue has increased 58 percent since 2010, and revenue per available room increased 16 percent in 2012 over the prior year, according to the firms. Terranea is operated through Lowe’s hospitality management subsidiary, Destination Hotels & Resorts.
— Rachel Goff