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MCLEAN, VA-JER Partners' Longhouse Hospitality group has refinanced a 42-hotel portfolio located across six states in a $264-million transaction. The company owns and manages more than 40 extended stay hotels, including Sun Suite Hotels and Crestwood Suite Hotels.

The group has used part of the proceeds to refinance and defease their existing debt. Working capital has been set aside for additional acquisitions, according to Kevin O'Shea, a real estate partner in the New York City office of Allen & Overy, which advised Longhouse. This portfolio, which includes hotels in Florida, Texas, North Carolina, Louisiana, Mississippi and Georgia, was originally financed in two securitized financings: a CSFB deal in August 2005 and a Bear Stearns transaction in 2001.

The portfolio's performance exceeded expectations, O'Shea says, which was one of the reasons behind the refinancing. "Four of the hotels were in the Gulf region and they were positively impacted by Hurricane Katrina." These hotels, two in the New Orleans-area and two in Mississippi, had been damaged, he explains, but the company dispatched contractors to the area and repairs were made relatively quickly.