The 15-story, 584-room Ritz Carlton Hotel and the 25-story, 1,000-room JW Marriott Hotel are the beacons on the property located at John Young Parkway and Central Florida Parkway. An 18-hole Greg Norman-designed championship golf course and a 40,000-sf spa complement the hotel properties, both managed under long-term contracts with Marriott International.
Under terms of the refinancing deal, Marriott International received $95 million in repayment of principal and interest of its mezzanine loan to the venture. Marriott International was also released from a $75-million principal guaranty tied in with the refinance contract.
"This transaction not only reduces the cost of debt for the venture, it also allows Marriott International to recycle substantial capital," says Arne Sorenson, Marriott International's executive vice president and chief financial officer. "With the upturn in lodging demand and the seasoning of new hotels, Marriott International is likely to recover other loans and guarantees entered into in prior years." Sorenson says Marriott expects to reinvest the cash "in attractive investment opportunities, including share repurchases."
Sorenson adds that pending reinvestment, Marriott International's 2005 net interest will decline due to the Grande Lakes refinancing. "This should reduce the company's earnings per share in 2005 by approximately two cents," the CFO says.
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