Brookfield grabs $ 240 million in CMBS refi on pair of Portland hotels – Business Watcher

Brookfield Asset Management landed a $ 240 million CMBS refinancing from Morgan stanley on a pair of hotels it owns in Portland, Ore., according to rating agency documents.

The five-year agreement (which includes an initial two-year term with three one-year extension options) locks in debt for the Hilton Portland Downtown and Duniway Portland, two adjacent units that Brookfield acquired four years ago. The floating rate loan, which is part of a single asset securitization, will earn LIBOR interest plus 3.05%, according to Morningstar Credit Ratings, who analyzed the transaction.

Together, the slightly larger Hilton and the newly remodeled Duniway include 782 guest rooms and 63,000 square feet of meeting space. (The Hilton has its own building, while the Duniway occupies the top 10 floors of a 20-story tower.) The hotels stand on the corner of Southwest Taylor Street and Southwest Sixth Avenue, and when Brookfield acquired them in 2015, they had been operated as a single Hilton hotel. But Brookfield closed one of the operations, at 545 Taylor Street Southwest, for a full renovation in 2017, spending $ 63,000 per room to rename the accommodation to Duniway, a luxury hotel. The Hilton Portland Downtown, at 921 Southwest Sixth Avenue, got a less in-depth refresh, with Brookfield spending $ 35,000 per room.

Each hotel has a fitness center and its own restaurant, and the Duniway also has a swimming pool and outdoor patio. Guests of either hotel can use all the amenities of both properties.

Tourism in Portland has increased every year since 2009, when 12.9 million visitors came to the metropolis of northwestern Oregon; in 2018, 19.9 million guests arrived. The hotel offer has exploded to keep pace, with no less than 20 units recently opened or under development, representing more than 4,000 new rooms in the city. But since large companies, including Under protection, Adidas, Google and Amazon All are committed to expanding their presence in the city, Morningstar analysts were optimistic about intensifying competition in the hospitality industry.

“Most of the new products are offered at lower prices or to meet a different set of demands in the city,” said the analysis team, led by Kyle stein, Noted.

Guests pay an average of $ 195 per night for rooms at both hotels, according to Morgan Stanley, which valued the properties’ combined value at $ 340.6 million. The Duniway generated net cash flow of $ 7 million last year, while the Hilton Downtown Portland grossed $ 12.4 million.

A Brookfield spokesperson confirmed the transaction but declined to comment further. A Morgan Stanley spokesperson did not immediately respond to an investigation.


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Sandy A. Greer

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