investor grabs loan note for two hotels
Opportunistic real estate investment firm PCCP has acquired the A note of a loan secured by two Bay Area hotels, the Crowne Plaza at San Francisco International Airpott in Burlingame and a Holiday Inn Express in Walnut Creek.
PCCP, formerly known as Pacific Coast Capital Partners, bought the debt from Column Financial. The hotels are owned by the Carlyle Group. PCCP purchased the B note of the same loan from Column Financial in December 2007.
The deal reflects PCCP’s appetite for performing and non-performing loans secured by quality real estate and strong ownership, according to partner Gregory Galusha.
“We are looking for note purchase opportunities – whether increasing our position in existing deals or new deals,” said Galusha. “Our experienced team has originated and held multiple floating rate real estate whole loans, mezzanine loans, B-notes, participations and preferred equity. We also asset manage and service more than $1.4 billion in 80 senior and mezzanine real estate loans.”
PCCP now holds both the A and B notes of the whole loan which was originally a $48.3 million senior loan secured by a portfolio of four hotels in Northern California. Since origination in August of 2007, two of the hotels, which include the Sacramento Holiday Inn and the Concord Holiday Inn, have been sold.
“This was a great opportunity to buy a note at a discount,” said Rob Cohen, vice president of PCCP. “We thought it was compelling because the exposure per hotel room was low and we were already invested in the transaction with our B note. We were comfortable with the collateral and the experience of the borrower.”
Cohen added that even though PCCP expects considerable downturn with hotel fundamentals in the near term, the long-term prospect of the Bay Area hospitality market is still strong and the low loan basis per key mitigates risk.
The Crowne Plaza hotel in Burlingame consists of 309 rooms and recently completed substantial renovation. The Holiday Inn hotel in Walnut Creek consists of 156 rooms and in November 2008 completed a conversion to a Holiday Inn Express
PCCP, formerly known as Pacific Coast Capital Partners, bought the debt from Column Financial. The hotels are owned by the Carlyle Group. PCCP purchased the B note of the same loan from Column Financial in December 2007.
The deal reflects PCCP’s appetite for performing and non-performing loans secured by quality real estate and strong ownership, according to partner Gregory Galusha.
“We are looking for note purchase opportunities – whether increasing our position in existing deals or new deals,” said Galusha. “Our experienced team has originated and held multiple floating rate real estate whole loans, mezzanine loans, B-notes, participations and preferred equity. We also asset manage and service more than $1.4 billion in 80 senior and mezzanine real estate loans.”
PCCP now holds both the A and B notes of the whole loan which was originally a $48.3 million senior loan secured by a portfolio of four hotels in Northern California. Since origination in August of 2007, two of the hotels, which include the Sacramento Holiday Inn and the Concord Holiday Inn, have been sold.
“This was a great opportunity to buy a note at a discount,” said Rob Cohen, vice president of PCCP. “We thought it was compelling because the exposure per hotel room was low and we were already invested in the transaction with our B note. We were comfortable with the collateral and the experience of the borrower.”
Cohen added that even though PCCP expects considerable downturn with hotel fundamentals in the near term, the long-term prospect of the Bay Area hospitality market is still strong and the low loan basis per key mitigates risk.
The Crowne Plaza hotel in Burlingame consists of 309 rooms and recently completed substantial renovation. The Holiday Inn hotel in Walnut Creek consists of 156 rooms and in November 2008 completed a conversion to a Holiday Inn Express
