Transactions and financing heat up

The industry continues its rebound from the effects of the pandemic with purchasing and financing deals.

Oxford Capital Group acquires Thompson Chicago
Oxford Capital Group LLC has acquired the 247-room, luxury lifestyle hotel Thompson Chicago. The company’s wholly owned affiliate, Oxford Hotels & Resorts LLC, also takes over management of the property.

Thompson Chicago joins Oxford’s growing national lifestyle hotel portfolio, which includes Godfrey Hotels in Chicago; Boston; Tampa, FL; and Hollywood, CA (with several additional locations in the pipeline); LondonHouse; Hotel Julian; Le Méridien Essex Chicago; Hotel Griffon; Hotel Vertigo; among others.

Thompson Chicago, which will remain affiliated with Hyatt’s luxury lifestyle hotel brand, Thompson Hotels, initially opened its doors in 2013. It is Oxford’s 25th lifestyle hotel transaction and 15th hotel project in Chicago.

Chatham Lodging Trust purchases extended-stay hotels in Austin
Chatham Lodging Trust, a hotel real estate investment trust (REIT) focused on investing in upscale, extended-stay hotels and premium-branded, select-service hotels, in an off-market transaction has acquired two hotels comprising 269 rooms at the Domain in Austin for $71.2 million, or approximately $265,000 per room.

The acquired hotels include the 132-room Residence Inn Austin Domain, which opened in July 2016, and the 137-room TownePlace Suites Austin Domain, which opened in June of this year. Upon stabilization, the acquisitions are expected to generate an estimated NOI yield of 8.0% to 8.5%.

The Domain is a mixed-use development known as Austin’s “second downtown” with more than 4.2 million sq. ft. of office space, 1.8 million sq. ft. of retail space, plus another 2.8 million additional sq. ft. of office space expected to be delivered over the next two years and another 3.8 million sq. ft. of office space planned thereafter. Companies with large offices located at The Domain include IBM, Amazon, Facebook, Indeed, Expedia/VRBO and Trend Micro Companies. Apple currently is constructing a 2 million sq. ft. office campus approximately five miles from the properties that will cost more than $1 billion and eventually accommodate around 15,000 employees. For comparison purposes, Apple Park, Apple’s main campus in Cupertino, CA, is approximately 2.8 million sq. ft.

Chatham funded the purchase using a portion of the proceeds from the recently completed Series A Preferred Share offering. The hotels will be managed by Island Hospitality Management.

The Mr. C Beverly Hills Hotel purchased
Braemar Hotels & Resorts Inc. has completed the acquisition of the 138-room Mr. C Beverly Hills Hotel in Los Angeles.

In addition, the company acquired five luxury condominium residences adjacent to the hotel. The total consideration for the acquisition was $77.9 million and consisted of $65.4 million for the hotel ($474,000 per key) and an allocated price of $12.5 million for the five adjacent condominium units. The acquisition was funded with approximately $30 million of cash, 2.5 million OP units, 500,000 warrants at a strike price of $6 and a $30 million mortgage loan. For purposes of calculating total consideration for the transaction, a price of $6 per share was assumed.

RobertDouglas, a real estate advisory firm that specializes in providing capital solutions in the hospitality industry, assisted Braemar with this transaction. Remington Hotels will manage the hotel.

JMA Ventures makes two investments
JMA Ventures LLC has recent closed on two investments.

In June, JMA Ventures along with Southern California-based LLJ Ventures, closed on the purchase of Marigot Bay Resort and Marina on the island of St. Lucia in the Southern Caribbean. The transaction involved a complicated tri-party structured agreement with the project lender and borrower and resulted in affiliates of JMA taking full control of the resort and marina operations as it embarks on a comprehensive reinvestment and rebranding of the resort.

In addition, JMA’s growing credit strategy business announced the closing of a participation in a construction loan for an under-construction luxury hotel and residence project in Park City, UT. JMA was able to leverage its deep experience in mountain resort markets and hospitality and its internal team of development leaders to quickly underwrite an investment in an attractive tranche of the existing construction loan, the company reports.

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