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Dealmaker: Sonnenblick-Eichner Secures $237M for Seven Hotels
Sonnenblick-Eichner Co., Beverly Hills, Calif., arranged $236.7 million for seven hotels owned and operated by Provenance Hotel Partners, Portland, Ore.
The hotels total 1,072 rooms in Portland and Seattle’s central business districts and in Nashville, Tenn.
Six properties received 10-year fixed-rate loans, all non-recourse and not cross-collateralized. These include: Hotel Lucia, Hotel deLuxe, Sentinel and Westin Portland, all in Portland, as well as Hotel Max in Seattle and Hotel Preston in Nashville.
Provenance Hotels’ newly launched fund, Provenance Hotel Partners Fund I, acquired the six properties following the financings. The Puget Sound Business Journal reported that the $525 million fund targets urban hotels with up to 300 rooms in the top 25 primary and secondary markets.
The seventh hotel, the Roosevelt Hotel in Seattle, received a non-recourse LIBOR-based loan that Provenance Hotels used to buy out their partners’ equity interest and will use to renovate and reposition the hotel.
Sonnenblick-Eichner Co. Principal Elliot Eichner said the borrower chose to refinance most loans prior to maturity. “The cost of prepayment was mitigated by the lower cost of capital and the risk associated with the potential of higher interest rates in the future,” he noted. “The borrower also realized pent-up equity they had in the portfolio.”