WASHINGTON, DC-An LLC has secured $28 million in hotel construction financing for a Courtyard Marriott it plans to build in Foggy Bottom. Total development costs will be $44.6 million for a loan-to-cost financing of less than 65%. With the financing now in hand, provided by M&T Bank, the company plans to break ground within 60 days.

The deal is notable for the District--it will be one of the few new hotels built here in years. It is also a positive sign for the hotel-finance community, which has been all but shut down since the start of the recession, says Andrew Coleman, vice president of capital markets at Walker & Dunlop. Coleman arranged the financing for the Foggy Bottom hotel, as well as a $17.2-million non-recourse construction loan for a 126-room Holiday Inn in Charleston, SC. “These deals definitely represent a thaw in new hospitality lending,” he tells GlobeSt.com.

The Foggy Bottom hotel, expected to deliver within 18 months, will be a limited-service, class A hotel with 147 guest rooms. The loan was structured with 36-month, interest-only financing and two one-year extension options.

Walker & Dunlop looked at the deal 24 months ago and put it on hold because of the market, Coleman says. “We picked it back up five or six months ago and ended up with six-plus very competitive bids.” That said, Coleman adds the hospitality finance market is not anywhere close to levels of a few years ago. The construction financing never would have been secured if the hotel had been in, say, Boise, ID or even Williamsburg, VA. “Only the top markets are getting construction financing right now.”

Meanwhile, the market for hospitality financing of stabilized properties has gained some significant traction, especially in the last 30 days, Coleman says. “A month ago, we had maybe five conduits competing for deals. Today I have 15--and that competition has pushed leverage for stabilized assets to north of 70%.”