Starwood Capital to refinance extended stay portfolio

George Sell George Sell Uploaded 22 October 2020

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US: Starwood Capital is accessing the commercial mortgage-backed securities market to refinance debt on a portfolio of 58 extended-stay hotels, as well as the construction costs of several recently built hotel properties.

According to ratings agency presale reports, the company is securitising a $265 million, two-year loan, with three one-year extension options, from Goldman Sachs that refinances $190.2 million in existing debt as well as $43.1 million in construction debt.

The loan also plus provides a $16.5 million cash-out payment to Starwood Capital.

The transaction will be backed by Starwood’s fee-simple interest in the hotel properties operating in 12 states under either the InTown Suites or UpTown Suites brands. Fifty of the hotels are InTown Suites properties with an average age of 16 years, and built as early as 1992. The UpTown Suites hotels were built between 2017 and 2019.

Moody’s Investors Service says the InTown/UpTown Suites portfolio of 7,140 guest rooms has generated “stable” dailyRevPAR since 2017.

In contrast to many hotel operators, the portfolio’s monthly revenue has increased each month since April — from $5.29 million to $6.28 million in August.

 

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