Dealmaker: Sonnenblick-Eichner Arranges $170M for Hotel Properties

Sonnenblick-Eichner Co., Beverly Hills, Calif., arranged $110 million to refinance the InterContinental San Francisco in the city’s South of Market district.

The 32-story, 550-room hotel on Howard Street adjacent to San Francisco’s Moscone Convention Center opened in 2008. It includes 43,000 square feet of meeting space. Michelin-rated restaurant Luce and a 10,000-square-foot spa occupy the ground floor.

The 10-year non-recourse fixed-rate loan priced in the low 4 percent range, less than 200 basis points over the swap rate. A Wall Street investment bank funded the loan.

“We received interest from both life insurance companies and Wall Street investment banks,” Sonnenblick-Eichner Principal David Sonnenblick said. “Given the interest rate floors instituted by most life insurance companies, a securitized loan provided the best execution for the borrower.”

Sonnenblick-Eichner Principal Elliot Eichner noted the new loan replaced an existing floating-rate LIBOR-based loan. “With the approximate 80 basis point increase in LIBOR over the last 12-month period in 2017, locking in a long-term fixed-rate loan provided the best alternative for the sponsor,” he said.

The firm also arranged $60 million for The St. Regis Deer Valley in Park City, Utah. The St. Regis Deer Valley includes 67 hotel condominium suites divisible into 177 hotel keys and 25 private whole-ownership residences.

Funded by a domestic life insurance company in a highly structured transaction, proceeds from the non-recourse financing refinanced existing debt with a new long-term fixed-rate loan. The financing will allow the resort’s next phase of development.

“This is the third financing that we have arranged for the ownership, including a $212.5 million construction loan and a subsequent permanent loan,” Eichner said.