Deutsche Bank plans a $1.4 billion securitization of a single loan that is secured by five full-service hotels located in Hawaii and California, according to a Morningstar presale report.
The capital structure of the deal, COMM 2014-KYO, consits of $551 million of AAA’ rated, class A notes; $191.5 million of AA’ rated, class B notes; $142.4 million of A’ rated, class C notes; $90 million of BBB+’, class D notes; $98 million of BBB-’, class E notes; $286 million of BB-’, class F notes and $40 million of B+’, class G notes.
The loan is secured by cross-collateralized and cross defaulted first-lien mortgages secured by the Kyo-ya Portfolio hotel properties.
The loan sponsors are Kokusai Kogyo Kanri Kabushiki Kaisha (a Japan corporation), Kokusai Kogyo Kabushiki Kaisha (also a Japan corporation) and Kyo-ya Pacific Company, LLC.
Starwood Hotels and Resorts operate the hotels under various Starwood brands including Sheraton, Westin, and Luxury Collection.
The deal will refinance $1.10 billion of debt that was previously securitized in GSMS 2013-KYO. The loan has a floating interest rate based on one-month LIBOR or prime rate.
Four of the hotel properties are located in Hawaii and one is located in California.
Three of the Hawaii hotels are in the Waikiki area of Honolulu on the island of Oahu, and one is in Lahaina on the island of Maui, according to the presale report. The hotels have been extensively renovated and, in some cases, repositioned, over the last 10 years. Morningstar noted that all four assets are “high-quality, beachfront properties in excellent locations”.
The fifth property, The Palace Hotel, is also well located within San Francisco’s central business district.