Dealmaker: Sonnenblick-Eichner Arranges $21M to Refinance Cotton Court Hotel in Lubbock, Texas

(Courtesy Sonnenblick-Eichner Co.)

Sonnenblick-Eichner Co., Beverly Hills, Calif., arranged $21 million in fixed-rate, first mortgage financing for the Cotton Court hotel in Lubbock, Texas.  

A Wall Street investment bank funded the five-year non-recourse loan. The full-term interest-only financing closed at a 7.6% interest rate. The lender required a rate buydown to achieve this rate and proceeds.

The 165-room boutique hotel in downtown Lubbock is one mile from both Texas Tech University, a campus with over 40,000 students, and Lubbock’s downtown Depot District. The Cotton Court hotel is also two blocks from the city’s convention center and is the closest hotel to the $158 million Buddy Holly Performing Arts Center, which opened in 2021.

The property features a retro-aesthetic design with architectural elements inspired by Lubbock’s historic cotton industry. 

“This interest-only, fixed-rate refinancing allowed our client to pay off their bank construction loan, which was a floating rate SOFR-based facility with amortization, allowing for a tremendous increase in cash flow to the partnership as well as a significant return of capital from the development,” said David Sonnenblick, Principal of Sonnenblick-Eichner Co.

Patrick Brown, also a Principal of Sonnenblick-Eichner Co., said there were more than 20 offers for this financing opportunity, “confirming that there remains a considerable amount of capital in the marketplace for quality transactions,” he added.