The Mayer Corporation and Hyatt Corporation are close to a $200 million refinancing of an oceanfront hotel located in Huntington Beach, according to a S&P Global report.
The current loan on the Hyatt Regency Huntington Beach Resort & Spa — which was developed by the Mayer Corporation, who bills itself the majority owner — has an early May maturity date. No payoff, refinance or workout had been disclosed, according to Trepp and Morningstar Credit. (Entities connected to the Mayer Corporation and Hyatt Corporation are the borrowers and loan sponsors).
A deal has not closed. It is anticipated to later this month. The latest $200 million mortgage loan would be a cash-out refinancing, so it would be used to repay the existing $182 million debt and fund $5 million in closing costs, plus return more than $12 million to the owner. The Orange County-based Mayer Corporation’s total investment in the Surf City hotel is about $179 million, per the S&P Global commercial mortgage-backed securities pre-sale report.
The note would be a five-year, fixed-rate commercial mortgage loan with an April 2031 maturity — it’ll be interest-only for its entire term, with an assumed interest rate equal to 6.15 percent, per S&P Global.
The 517-key Spanish-style hotel is on 21500 Pacific Coast Highway in the beach town. Palm trees and fountains dot the 15 acres of coastal real estate. The $200 million debt amounts to about $387,000 per room. (The Mayer Corporation owns the Waterfront Beach Resort, a Hilton hotel next to the Hyatt Regency Huntington Beach Resort & Spa, too).
The Southern California hotel industry has seen better days, though there are exceptions to that distress, including a statewide near-record deal in terms of price per room. In Orange County, 14 sales closed last year. That was unchanged from the year before, but when it comes to dollar amount, it was a 78 percent decrease to $137 million, according to an Atlas Hospitality Group report. The median price per room fell 56 percent to $140,000.
Neither Robert Mayer Jr., chair of the company, nor the Hyatt Corporation immediately responded to a request for comment.
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