Rockbridge president/CEO Ronald L. Callentine says the turned-off funding spigot may be opening again.

"Throughout the second half of 2001 and first half of 2002, hotel owners and operators seeking capital for their projects found it difficult," Callentine says in a prepared statement. "However, this trend appears to be turning, as lenders today are demonstrating a renewed interest in looking at quality loans."

He says RockBridge has "maintained its focus on hospitality, even through the recent capital pullback, and continues to quickly identify and originate loans that offer strong, risk-adjusted returns."

He cites the Tampa deal as an example. The three-year Tampa loan to Bethesda, MD developer RLJ Development LLC carries a 7.9% interest rate and represents 72% of the project's capitalization.

The five-year Jacksonville loan to Atlanta-based Noble Investment Group has a base interest rate of 12%, plus participation in future cash flows. When combined with senior financing, the loan represents 82% of the property's capitalization, RockBridge managing director James T. Merkel says in a prepared statement.

At closing, Rockbridge sold the Tampa loan to Nationwide Life Insurance Co. of Columbus, OH and then bought a $3.3 million Note B of the loan funded by RockBridge Real Estate Fund LLC. The proposed financing structure allows for a $4.5 million interior renovation and 12,000 sf of meeting space and lobby area.

On the Jacksonville transaction, RockBridge estimates the loan is also safely covered. RockBridge's Merkel says the Hilton Garden Inn, in the northeast quarter of the Deerwood Park office complaex, is "a strong performing property."

With 1,900 sf of meeting space, the property has "outperformed the market and has generated strong NOI returns," Merkel says in the statement. "The property"s RevPAR penetration in the market has consistently exceeded 100% since March 2001."

On the deal itself, Merkel says, "In a difficult refinancing market, our mezzanine loan enabled Noble to recapture some equity for reinvestment while preserving Noble's interest in the future value of the hotel."

Noble developed the hotel and also manages the property. The Georgia company has a national portfolio of 25 hotels and manages 19. Memphis, TN-based Davidson Hotel Corp. manages the Hilton Tampa Westshore.