SAN FRANCISCO—The city's newest hotel just got more bling. First mortgage financing of $110 million will refinance the InterContinental San Francisco, a 32-story 550-room hotel located adjacent to the expanding Moscone Convention Center in SOMA. Sonnenblick-Eichner Company arranged the funding.
“The InterContinental San Francisco is the newest high-rise hotel to have been developed in San Francisco and is the only San Francisco hotel that is contiguous to the Moscone Convention Center, which is completing a 300,000-square-foot expansion,” Sonnenblick-Eichner Company principal David Sonnenblick tells GlobeSt.com. “Being the flagship property for InterContinental Hotels Group in the gateway city of San Francisco will result in the property continuing to be one of the finest performing hotels in the market.”
The interest rate for this 10-year non-recourse fixed-rate loan is in the low 4% range, and was priced at less than 200 basis points over the swap rate. The loan was funded by a Wall Street investment bank.
“We received interest from both life insurance companies and Wall Street investment banks. Given the interest rate floors instituted by most life insurance companies, a securitized loan provided the best execution for the borrower,” said Sonnenblick.
The four-diamond AAA-rated hotel includes 43,000 square feet of meeting, banquet and pre-function space; Luce, a Michelin-rated restaurant; a 10,000-square-foot spa and subterranean parking accommodating 180 valet spaces.
“The new loan replaced an existing floating rate LIBOR-based loan. With the approximate 80 basis point increase in LIBOR over the last 12-month period in 2017, locking in a long-term fixed rate loan provided the best alternative for the sponsor,” says Elliot Eichner, also a principal of Sonnenblick-Eichner Company.
Sonnenblick-Eichner Company is a Beverly Hills, CA-based real estate investment banking firm that specializes in arranging structured finance for acquisition, construction and permanent loans, interim and mezzanine financing as well as joint-venture equity transactions. The company markets institutional real estate and provides capital for all product types.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
