In an otherwise slow week for commercial mortgage-backed securities, Deutsche Bank and Citigroup are marketing a $775 million deal backed exclusively by hotels.
The transaction, COMM 2013-THL, is a refinance of the COMM 2011-THL transaction. It is sponsored by two investment funds run by Goldman Sachs: Whitehall Street Global Real Estate Limited Partnership 2005 and Whitehall Street Global Employee Fund 2005.
Fitch Ratings has assigned preliminary ‘AAA’ ratings to two tranches totaling $357.8 million that maturing in June 2030. Both benefit from credit enhancement of 53.8%
The certificates in this transaction represent the beneficial interests in a trust that holds a $775 million mortgage loan secured by 154 hotel properties located in 32 states across the U.S.
Two of these properties, the Holiday Inn Express in Arlington Heights, IL and the Hampton Inn, Bloomington, MN are classified as ‘special release properties,’ and do not have an allocated loan balance, cash flow or value. These two properties are expected to be sold and released from the trust by Sept. 21, 2013.
The overall portfolio has performed well over the past two years, however. Revenue per available room was up 4.9% in 2012 over 2011 after rising 6.8% in 2011 over 2010.
There is additional debt financing on the properties in the portfolio: two mezzanine loans totalling $560 million. In addition, after paying down the outstanding preferred equity by $280.1 million as part of the refinancing, approximately $216.5 million of preferred equity will remain.