American International Group is the lender behind the $65.2 million of first mortgage for the refinancing of two Hyatt-branded properties: the 149-room Hyatt House Seattle/Redmond and the 160-room Hyatt House Seattle/Bellevue, Washington, Real Estate Capital has learned.
The non-recourse 10-year fixed rate financing was priced in the low four percent range with interest-only payments for the first five years. The loans were not cross-collateralized. The refinancing converts the previous floating rate loans — slated to come due in 2016 and 2017 — into fixed rate loans with a lower rate.
“The borrower financed prior to their current loan maturity incurring a prepayment cost,” said Patrick Brown, a principal at Sonnenblick-Eichner Company, which arranged the financing on behalf of the sponsor, LodgeWorks. “The fixed low interest rate loan we arranged more than offset the cost of the prepayment fee.”
Sonnenblick-Eichner Company has worked both with the sponsor and AIG on multiple occasions in the past. Established in 2000, the firm provides an array of real estate investment and banking services, spanning debt, equity and investment sales.
“We had tremendous lender interest in these transactions from both Wall Street investment banks and life insurance companies,” said Elliot Eichner, Sonnenblick-Eichner Company’s co-founder and principal. “The borrower chose a life insurance company execution giving them the ability to lock the rate at application while having the benefits of a portfolio lender.”