(Mark your calendars: RealShare HOTELS 2011, Sept. 15 at the Hilton New York, and don't forget RealShare New York takes place Oct. 12 at the Marriott Marquis.)
NEW ROCHELLE, NY-Hotel REIT Chatham Lodging Trust closed on a $15.8 million fixed-rate mortgage loan for the 124-room Residence Inn by Marriott at 35 LeCount Place in downtown New Rochelle, making it the eighth individual property loan in the company’s portfolio. The transaction was handled by the Sonnenblick-Eichner Co., which arranged the first mortgage non-recourse financing for the extended stay hotel, located 20 miles from Manhattan in Westchester County.
The 10-year loan was provided by Alabama-based Regions Bank and carries a fixed interest rate of 5.75% per annum, with principal and interest based on a 25-year amortization. According to Chatham, proceeds from the loan will be used to repay outstanding borrowing under the company’s secured revolving credit facility and for general business purposes.
Dennis Craven, Chatham’s chief financial officer, says in a statement that the property loan gives the company combined borrowings of approximately $162 million, at a weighted average rate of 5.97% and a weighted average maturity in 2017. “We were able to add this financing at historically attractive pricing and at a value which amounts to approximately 75% of what we purchased this hotel for less than a year ago.”
Chatham acquired the 10-story hotel for $21 million--or about $169,000 per unit--in October 2010. Since its April 2010 IPO, the REIT has acquired 13 hotels nationwide, including a 145-room Homewood Suites by Hilton in Carlsbad, CA for $32 million and a Residence Inn by Marriott in Holtsville, NY on Long Island for $21.3 million.
Craven tells GlobeSt.com that the New Rochelle location has "a good mix" of tourism-related occupancy for people visiting New York City, but other local factors like shops, restaurants and entertainment that also make it an attractive location for visitors. "It is in the center of a bunch of different demand generators, whether that be tourism from New York City, local universities and the fact that it is right downtown in New Rochelle,” he says. “It’s very well-located in that market.”
The company was also responsible for one of the biggest hotel transactions earlier in the year, when a joint venture of Chatham and Cerberus Capital Management purchased the 64-hotel Innkeepers portfolio valued at $1.12 billion.
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