Markets are Liquid for CRE Financing

The Marriott Monterey is adjacent to the Monterey Conference Center.

MONTEREY, CA—First mortgage debt for the refinancing of the 341-room Marriott Monterey hotel has been arranged. The 10-year, fixed-rate financing of $65 million was provided by a European money center bank and was underwritten at a debt yield below 10%. The funding was obtained by real estate investment banking firm, Sonnenblick-Eichner Company . “The financing replaced the maturing debt that we arranged in 2006,” says Patrick Brown , a principal of Sonnenblick-Eichner Company. “We are pleased to have had the opportunity to work again with the principals of Wright Hotels and Frank K. Finneran & Co. on behalf of the property owner, San Carlos Associates .” The AAA-rated, Four Diamond hotel is located adjacent to the Monterey Conference Center in the heart of the downtown retail district. The 10-story hotel includes approximately 16,500 square feet of meeting space, spa, two restaurants and subterranean parking for 142 cars. David Sonnenblick , principal, tells GlobeSt.com: “We have seen the capital markets for financing of all types of commercial property tighten up over the last several weeks. AAA spreads on CMBS bonds have tightened to sub 130 over the swap, compared to them being nearly 180 over earlier this year. Though new risk retention rules will affect CMBS execution as we progress into the summer and fall, as we sit today, the markets are very liquid for commercial real estate financing.” The hotel provides guests with high-speed Internet access, ergonomic workspaces, access to personal Netflix accounts on flatscreens now featuring Internet TV. Another unique feature is on-site restaurants just steps from guest rooms. “The widening spreads in the bond market made finding attractive long-term CMBS debt very challenging,” said Elliot Eichner , Sonnenblick-Eichner Company principal.  “However, we were able to rely on our relationships with other domestic and off-shore lending sources, and through our marketing efforts were able to attract numerous loan offers from insurance companies, money center and investment banks.” Monterey is home to the Monterey Aquarium and Cannery Row, and within close proximity to the world famous Pebble Beach Golf Links .  The Monterey area hosts more than 4 million visitors per year and is one of the favored tourist destinations in the country.