Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Thursday, 10 December 2015

Boutique Hotel Specialist Raises $525Mln for Debut Investment Fund

Provenance Hotel Partners, a Portland, Ore., developer and operator of high-end boutique hotels, has gotten into the investment-management business, raising $525 million for its first fund. It's used some of the funds to recapitalize seven hotels it manages, a transaction that included the defeasance of seven CMBS loans with a balance of $167.5 million.

Commercial Real Estate Direct Staff Report

Provenance Hotel Partners, a Portland, Ore., developer and operator of high-end boutique hotels, has gotten into the investment-management business, raising $525 million for its first fund.

It's used some of the proceeds of the fund to recapitalize seven of the nine hotels it manages. It bought out its various partners and refinanced $167.5 million of CMBS debt against the properties. The CMBS loans all were defeased, or replaced by government securities.

The seven properties have a total of 1,240 rooms. Four are in Portland, while the remainder are in Seattle, Tacoma, Wash., and Nashville, Tenn. Last year, they generated a total of $25.3 million of net cash flow, according to servicer data compiled by Trepp LLC.

The mortgages against the properties generally don't start maturing until at least another year. But because cash flow had increased substantially since the loans were written, and the properties' value had climbed as well, they were able to support much more debt.

Provenance plans to raise additional capital on behalf of the fund, Provenance Hotel Partners Fund I, and use that to buy, develop and redevelop additional properties, which it would hold for at least 10 years each. Its aim is to buy properties with between 100 and 300 rooms each that are in the top 25 urban markets in the country.

Provenance is led by Gordon Sondland, its chairman and chief executive, and Bashar Wali, its president. It long has focused...





weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
warehouse-backstage