Westin Owner Lands $11M Mezzanine Loan

The interest rate fixed is at 12% in the first two years with a share of available cash flow not to exceed the stated rate of 14%, and fixed at 14% thereafter. Loan payments are interest only throughout the seven-year term. Ashford received an origination fee of 1%. The mezzanine loan may be prepaid at any time in whole or in part subject to a prepayment penalty.

"The Westin Westminster is a well-positioned property with a very solid brand and the highest quality rooms in the market," says Monty J. Bennett, president and chief executive officer of Ashford. "This loan is another great example of our ability to find lending opportunities that combine very attractive yields with strong credit profiles while at the same time keeping our investment at relatively low loan-to-value levels. This transaction also highlights Ashford's unique ability to be the preferred capital provider to the lodging industry in that we offered four different transaction alternatives to meet Inland Pacific's needs."

Financing on The Westin Westminster includes a first mortgage of $30.5million by CIBC and the $11 million mezzanine loan originated by Ashford. Ashford's mezzanine loan represents between 57% and 78% of the borrower's capital structure. The trailing 12-month debt service coverage ratio for the entire loan is 1.30.

The 14-story, 369-room Westin opened in April 2000 and is located halfway between Downtown Denver and Boulder on the Boulder turnpikeapproximately five miles from Interlocken Advanced Technology BusinessPark, home to Sun Microsystems, Avaya Communications, Level 3Communications and StorageTek. The hotel is close to a number of retail shops, theaters, restaurants, golf courses and a large ice arena.

The hotel complex includes a 35,694-sf conference center and 4,800-sf pavilion that are leased from the City of Westminster along with approximately 30,000 sf feet of additional exterior meeting spaceoverlooking a lake and the Rocky Mountains. The Westin Westminster also features a business center, gift shop, one restaurant, indoor swimming pool, exercise facility and high speed internet access in all guestrooms. Starwood Hotels & Resorts manages the property.