BETHESDA, MD-Locally-based Pebblebrook Hotel Trust and its JV partner Denihan Hospitality Group, have secured a $410 million loan that is interest only and non-resource with a 3.67% interest rate.
The loan has a term of five years and is secured by a first mortgage on the Affinia Manhattan, Affinia Shelburne, Affinia 50, Affinia Gardens and The Benjamin—hotels in New York that in total comprise 1,491 guest rooms. Proceeds will be used to fully pay off the existing mortgage on these properties—dubbed the Manhattan Collection — and for general business purposes.
The new financing, not surprisingly considering the low interest rate environment, has more favorable terms and significantly lower risk.
“As a result of this financing, Pebblebrook has no debt maturities until 2016 and we continue to have 12 hotels unencumbered by debt, representing nearly $1 billion of invested assets,” Raymond D. Martz, CFO for Pebblebrook Hotel Trust, says in a prepared statement. Hunton & Williams LLP advised the JV in the deal.
Pebblebrook is also kicking in $50 million of preferred capital to the Denihan JV, of which Pebblebrook owns a 48% stake. This preferred capital has a five and a half year term, an annual coupon rate of 9.75% and is prepayable at any time by the joint venture, the company says.
In a separate financing, Pebblebrook has also executed a new $81 million non-recourse, secured loan with PNC Bank, N.A. at a fixed annual interest rate of 3.69%. This loan has a term of seven years and is secured by a first mortgage on the REIT’s 450-room Westin Gaslamp Quarter in San Diego. Proceeds from this loan will be used to fund acquisitions and for general business purposes.