AUSTIN, TX-The Four Seasons Hotel here has received a $56 million first mortgage and mezzanine loan to refinance its existing mortgage. Los Angeles-based Mesa West Capital provided the hotel’s owners, Lodging Capital Partners and Syndicated Equities Group, with the first mortgage, while Blackstone Real Estate Debt Strategies provided the mezz piece.
Mesa West Capital provided the financing through its $614.5 million Mesa West Real Estate Income Fund II LP, which closed in June 2010. The floating-rate loan has a three-year term, according to Ryan Krauch with Mesa West Capital.
Overlooking Lady Bird Lake, the Four Seasons is located in the heart of the central business district adjacent to the Texas State Capitol and University of Texas. After acquiring the landmark hotel in 2006, Lodging Capital Partners and Syndicated Equities Group completed an $11.4 million renovation that included an upgrade of the guestrooms, a new 5,500 square-foot luxury spa, and a redesign of the hotel's fine dining restaurant.
Krauch notes that many hotel owners are choosing to refinance their existing mortgage with short-term, floating-rate loans instead of locking in long-term, fixed-rate loans. “Even though interest rates are favorable, values are down for hotel assets, and proceeds are low,” he notes. “Long-term, fixed-rate lenders price their loans off of in-place cash, and if NOIs are at absolute low, it would follow that it’s the worst time to get a loan from a proceeds perspective.”
Mesa West Capital's Director Raphael Fishbach originated the loan and heads up the company's New York City office. The financing was arranged by Mark Gordon and Jared Kelso of Cushman & Wakefield Sonnenblick-Goldman and Elizabeth Kogen of JMB Financial Advisors.
Including the Four Seasons loan, Mesa West Capital has originated more than $160 million in financings through Fund II. The firm’s first fund originated $1.5 billion in 83 financings.
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