After a brief pause, single-asset single-borrower CMBS deal flow kicked off again this week with a deal backed by a $360 million Barclays loan that is secured by Red Roof brand hotels.
BBCMS Trust 2015-RRI is backed by a five-year, floating-rate loan with a 60% LTV. Kroll Bond Ratings Agency, based its ratings on a stressed LTV of 86.5%.
Kroll assigned preliminary 'AAA' ratings to the class A notes, 'AA+' ratings to the class B notes, 'AA-' ratings to the class C notes, 'A-' ratings to the class D notes, 'BB+' ratings to the class E notes and 'B+' ratings to the class F notes.
Westmont Hospitality Group and Bestford Capital used proceeds from the loan to acquire the portfolio of 89 Red Roof hotel properties that secure the loan. Westmont Hospitality Group was founded in 1975, and is one of the largest privately owned hotel companies. The firm has an ownership interest in, or manages over, 500 hotels throughout North America, Europe and Asia.
The properties were built between 1975 and 2001 and range in size from 79 to 212 keys. Since 2011, approximately $83.5 million ($7,796 per key) has been spent on capital improvements across the portfolio. The sponsor has budgeted an additional $11.8 million ($1,103 per key) to be spent in the near term to upgrade 22 hotels.