Braemar secures extension on $51M Hotel Yountville mortgage
Firm also negotiates a rate cap and option for another extension in November
Dallas-based hospitality firm Braemar Hotels & Resorts has secured an extension on a $51 million mortgage that was set to mature this month.
The firm, previously known as Ashford Hospitality Prime, secured a six-month extension on the loan for Hotel Yountville, an 80-key property in Napa County, company executives disclosed during its first quarter earnings call. Braemar had been in negotiations for an extension since last month, according to a previous Securities & Exchange Commission filing. At the time, the company disclosed that it was looking to either refinance or extend the deadline for the loan.
Along with the extension, Braemar purchased an interest rate cap that expires on Nov. 10. The firm also has the option to extend the loan for an additional six months.
The deal comes at a time when rising interest rates have put a premium on loan extensions, because a refinance would trigger higher debt payments. In San Francisco, the Trump Organization and Vornado Realty Trust are seeking an extension for their 52-story office tower at 555 California Street. In New York, Tishman Speyer wants a $485 million extension for a commercial mortgage backed by 400 Park Avenue.
Braemar acquired Hotel Yountville, located at 6462 Washington Street in Yountville, for $96.5 million in May 2017, property records show. The firm did not respond to a request for comment.
Braemar is looking to refinance or extend its mortgage on another Yountville property. The 62-room Bardessono Hotel and Spa, which the firm bought for $85 million in 2015, backs a loan that matures in August. “This is a very low leverage loan, and we don’t anticipate any challenges with extending or refinancing it,” Richard Stockton, Braemar’s CEO, said during the earnings call.
Braemar’s moves unfold as distress grips lodging loans across the U.S. According to December data from Trepp, nearly $4.1 billion out of $93 billion in outstanding hospitality loans are delinquent. Trepp estimates that $35 billion in lodging loans are scheduled to mature this year.
The distress on hotel assets has already manifested itself in the Bay Area. In March, Moody’s downgraded the $725 CMBS loan on San Francisco’s two largest Hilton hotels. That same month, Highgate and Flynn Properties bought the Huntington Hotel in San Francisco’s Nob Hill after the $56.2 million mortgage on the property went into default.