Senior financing was provided by Heller Financial in the form ofa $22.9-million first mortgage. Columbus, OH-based RockBridgeCapital, Inc. provided a $6.5-million mezzanine loan. Coupledtogether, the four-year loan carries a 12% base rate with cash flowand residual value participation. That leaves about 11% forDavidson Hotels' equity.

Davidson Hotels has been operating the property since 1997through a joint venture with Prudential, which recently wasdirected by a pension fund to reduce its hotel exposure. "They'renot selling because they want to," says James T. Merkel, vicepresident of RockBridge.

The deal was in the works before the Sept. 11 terrorist attackson the US, Merkel says. Business at the hotel was down about 10%before the attacks, he notes, but is off nearly 20% on a 12-monthtrailing basis afterward. While other lenders may have taken a passon such numbers, other aspects of the deal were appealing, Merkelsays.

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