A $48.8 million refinancing deal has been completed for a hotel near Rainey Street in downtown Austin.
Newport Beach-based real estate firm Stratus Development Partners and Choice Hotels International, a Maryland-based hospitality company, secured the bridge financing for the Cambria Hotel Austin Downtown, at 68 East Avenue, the Austin Business Journal reported. New York-based Benefit Street Partners provided the debt, which comes to $230,000 per key for the 212-key hotel.
It will be used to repay the hotel’s construction loan, establish an interest reserve and cover closing costs. The hotel opened last year. It was appraised at $58.1 million by the Travis Central Appraisal District.
Georgia-based Hunter Hotel Advisors represented Stratus in the deal. The transaction was one of the first significant deals for Hunter’s capital markets team, led by senior vice presidents Charlie Ryan and Adeel Amin.
The Cambria Hotel’s new financing comes on the heels of another significant deal in Austin’s vibrant hotel sector. The Fairmont Austin, the city’s largest hotel with 1,048 rooms, obtained a $430 million CMBS loan from Manchester Financial Group in July.
That refinancing package will be used to replace an existing $300 million senior loan, $125 million in mezzanine debt and roughly $5 million in closing costs, thus facilitating the hotel’s expansion and upgrades. As part of the upgrades, Manchester plans to spend $21.3 million to renovate rooms, banquet spaces and dining outfits at the hotel.
Austin’s hospitality market has a few bulls.
Dutch company CitizenM opened its first hotel in Texas at 617 Colorado Street this year.
“We have 15 or so cities that we want to be in in the U.S., and Austin is just one of them,” Rani Gharbie, CitizenM’s managing director of investment and development told The Real Deal. “The economics of this city fit our targets, more so than any other city in Texas.”
Local firm Pearlstone scrapped plans for a condo tower in downtown Austin late last year and is instead developing a 35-story hotel at 14th and Lavaca streets.And just last week, Hyatt bought Standard International for $335 million, in a deal that includes the Austin Motel, Hotel St. Cecilia and Hotel San Jose.
— Andrew Terrell
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