A year ago such a deal would have been impossible--not only becauseof the nonrecourse component but also because it is a hoteltransaction. However, increasingly nonrecourse money is being madeavailable to hotel transactions that have good cash flows. But Sonnabendsays it is still rare for these funds to be lent to hotels for renovations. "Typically, it is to pay off existing loans," he tellsGlobeSt.com.

PMZ Realty Capital's Hotel Finance Group has been reaching out to newlenders to close deals, according to Peter Berk,president of PMZ. Hilton Washington, DC/Silver Spring is a 260-keyhotel with 20,000 square feet of meeting space.

The DC area hotel market is showing distinct signs of thaw lately.Although never troubled to the extent that other markets have been,the area's hotel market has been stagnant, with few deals closing overthe last year. Financing has also been difficult to source as the sector suffered declining fundamentals in the recession.

Other recent transactions in the area include Bethesda, MD-based LaSalle Hotel Properties' acquisition of the Sofitel Washington, DC Lafayette Square last month for $95 million--the first major hotel trade in the city in more than a year.Also in February, Braxton Hotel & Condominium sold the District Hotel for $8.5 million to Cherry Blossom Hospitality, a locally-basedhotelier.