DTZ Arranges Loan for Hawaii Hotel

KAPAA, HAWAII-DTZ has arranged a repositioning loan for the 206-key Kauai Sands Hotel in Kapaa, Hawaii. The loan will facilitate a comprehensive overhaul of the property including exterior renovations, landscaping, extensive room renovations, and complete FF&E to upgrade the hotel from 2 stars to 3.5 stars.

According to SVP/managing director Jeffrey Donnelly who leads DTZ’s Real Estate Investment Banking Group out of New York, and who oversaw the capital raise: “This is an exceptionally well-sited property on a white sand, swim-out beach that needs and deserves extensive renovations. There were a couple of aspects of the deal that made this financing a little harder to place. One of the challenges was that since our clients had acquired the hotel through a foreclosure auction, the financing was at a high loan-to-cost ratio, but at a very low loan-to-value ratio, which narrowed our universe of prospective lenders. We were successful in finding a lender that understood that the sponsor had simply bought the property right, and that also shared the borrowers’ belief in its upgrade potential.”