PORTLAND, Ore. — Sonnenblick-Eichner Co. has arranged $236.7 million of first mortgage financing for seven lifestyle hotels owned and operated by Provenance Hotels.
The seven hotels total 1,072 rooms and are mainly located in Seattle and Provenance’s hometown of Portland. One property is located in Nashville, Tenn.
Six of the properties received 10-year fixed rate loans, all non-recourse and not cross-collateralized. These properties include Hotel Lucia, Hotel deLuxe, Sentinel, and Westin Portland — all located in Portland — as well as Hotel Max in Seattle and Hotel Preston in Nashville. Provenance Hotel Partners Fund I acquired these six hotels following the financings.
“The borrower chose to refinance a majority of the loans prior to maturity,” says Elliot Eichner, principal of Sonnenblick-Eichner Co. “The cost of prepayment was mitigated by the lower cost of capital and the risk associated with the potential of higher interest rates in the future. The borrower also realized pent-up equity they had in the portfolio.”
The financing of the seventh hotel, the Roosevelt Hotel in Seattle, was a non-recourse, LIBOR-based loan. Provenance Hotels will use the money to acquire its partners’ equity interest and for the upcoming renovation and repositioning of the hotel.
“We were engaged to refinance loans we had previously arranged for the borrower,” says Patrick Brown, principal of Sonnenblick-Eichner Co. “Through our marketing efforts we were able to source financing quotes from multiple capital sources.”
Sonnenblick-Eichner Co. is a real estate investment-banking firm based in Beverly Hills, Calif.