Valencia Hotel Group Lands Refinancing for San Antonio Hotel

Valencia Hotel Group scored refinancing for its River Walk hotel in San Antonio.

The Houston-based firm secured a $22.6 million loan for Hotel Valencia Riverwalk, at 150 East Houston Street, according to a release from Sonnenblick-Eichner Company, which arranged the deal.

It’s a five-year, fixed-rate loan that will finance a maturing 10-year loan on the property, said Patrick Brown, a principal at Sonnenblick-Eichner. The debt amounts to $106,100 per key.

Brown said the debt markets are “extremely liquid” for hotel loans, and the transaction generated a lot of interest.

When Valencia developed the 213-key hotel in 2003, it was considered the city’s first boutique hotel. The firm developed it on a site leased by former owner Maryland-based Federal Realty Investment Trust.

Valencia completed a $10 million upgrade at the property in 2017. The property features almost 10,000 square feet of meeting space, a gym, interior courtyard and three food and beverage options: Dorrego’s, Naranja Tequila and Mezcal Bar, and Café Naranja.

Hotel Valencia Riverwalk is part of San Antonio’s most popular tourist attraction, the River Walk, which is a public park that hugs the San Antonio River and is lined with stores and restaurants. It’s also within walking distance of the city’s convention center.

Despite the availability of fresh financing for hotels, San Antonio’s downtown hospitality market is still struggling to stabilize after the pandemic.

The submarket sold 745,000 room nights in the first quarter, a drop of 15.4 percent from the first quarter of 2019, the San Antonio Business Journal reported, citing consulting firm Source Strategies.

Valencia’s other Texas properties are in Austin, Dallas, Lubbock and College Station. Its portfolio also includes a hotel in San Jose, California. It has two additional hotels in the pipeline: one in Tuscon, Arizona, and another in Arlington, Texas.