The hotel's central location is in the midst of Sacramento's Midtown neighborhood.
SACRAMENTO—The development of a Hyatt House inched one step closer with the construction loan now in place. The new 128-room hotel is anticipated to open in 2021 and the project developer is Roger Hume, founder of Hume Development Inc.
Dallas-based Hall Structured Finance recently closed a new first lien construction loan totaling $26.7 million to finance the project.
"The hotel's central location in the highly walkable Midtown neighborhood in Sacramento will provide guests with easy access to the city's thriving art and cultural scene," said Mike Jaynes, president of Hall Structured Finance. "Sacramento continues to be a top-performing hotel market, and with the project's strength of sponsorship and Hyatt's strong loyalty and reward program, this was an ideal hotel for us to finance."
The planned hotel features elements of both new development and adaptive reuse as the facade of the historic Eastern Star Temple, originally constructed in 1928 as a meeting hall for a Masonic women's organization, will be retained and house the hotel's lobby, meeting spaces, breakfast area, bar and lounge. However, 90% of the hotel will be new construction.
The Hyatt's Midtown location will provide guests with access to a 24-hour walkable urban neighborhood that offers dining, boutique shopping, entertainment and cultural festivities. The hotel is also located across the street from Sutter Medical Center, which recently completed a $1 billion expansion.
"My partner and I feel very fortunate to have this rare opportunity to create such an amazing property for the community. It is our sincere desire to pay respect to the great history the building has while creating a new vision for its future," said Hume.
Chris Chase, president of Chase Financial Corp, sourced the financing for the project.
"Hall Structured Finance was very responsive, got involved early in the process and was open to structuring the deal with the needs of the borrower top-of-mind, making them the ideal lender for this hotel," Chase tells GlobeSt.com. "We are looking forward to seeing this great project with historical significance open in the Midtown neighborhood of Sacramento."
Hall Structured Finance has closed seven loans in California since 2017 and $300 million in loans in 2019. Given the company's current pipeline, it is on track to close more than $500 million by year-end. This is the sixth Hyatt hotel development for which the company has provided a construction loan.
Shifts in the depth and timing of an expected slowdown in the nation's economy have impacted CBRE Hotels Research's outlook for the US lodging industry for the next few years. According to the latest edition of Hotel Horizons, CBRE's forecasts for RevPAR changes in 2019 and 2020 have been adjusted slightly downward, but the outlook for 2021 has improved. And, it projects GDP growth to average 1.9% during the second half of 2019.
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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.
