RALEIGH, NC-Struggling CMBS markets aside, Concord Hospitality Group and Kane Realty Corp. have secured a $47.5 million fixed-rate first mortgage on the Renaissance Raleigh North Hills Hotel. RBS Commercial Real Estate offered the loan on the four-star property in the heart of the North Hills Lifestyle Center.
Senior vice president Mark Fisher and senior analyst Rayna Karaivanov of CB Richard Ellis' Capital Markets Debt & Equity Finance Group in New York City, along with Bryan Kane of CBRE's Debt & Equity Finance Group in Raleigh and Bradley Burwell and Jonathan Rice of CBRE Hotels, placed the loan.
"Without question, the CMBS market is in turmoil," Fisher tells GlobeSt.com. "Over the six-week application to closing period, credit and SWAP spreads fluctuated over 150 basis points and 90 basis points, respectively."
RBS offered a 10-year loan with an interest rate “with a five handle on it” and 30-year amortization, Fisher says. A financially sophisticated borrower, he adds, and a joint effort with the RBS origination staff helped get the deal done.
"The fact that this deal continued to move forward and closed is a testament to CMBS’ resilience as exemplified by its ability to cope with such violent swings in the market," Fisher says. "While CMBS remains at the 70% level for well-positioned, stabilized properties, most life companies are on the sidelines with a handful seeking primarily major markets with LTVs below 60%."
The property is located in the North Hills Lifestyle Center, which offers 700,000 square feet of retail space, 100,000 square feet of office space, a 14-screen cinema, the Lassiter Retail Center, the 297-unit Alexan apartments, the 409-unit Park & Market luxury apartments, the 17-story 300,000-square-foot CapTrust Tower office building, as well as numerous other shops, restaurants and recreational facilities.
"The hotel financing market remains difficult, but well-located hotels with a proven track record, like the Renaissance Raleigh North Hills Hotel, will always be attractive to sophisticated investors and lenders," Mark Laport, president and CEO of Concord Hospitality, said in a statement. Renaissance was named 2010 Hotel of the Year by Marriott.
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