The PGA National Resort Commercial Mortgage Trust, 2023-RSRT is raising $250 million in mortgage pass-through certificates secured by a two-year mortgage loan on a 330-key resort hotel and golf course in Palm Beach Gardens, Fla.
Brookfield Real Estate Partners III and several related entities are sponsoring the loan, which is slated to close on April 21, 2023, with two-year, floating-rate and interest-only terms, according to a pre-sale report from Fitch Ratings. ParkRidge Lender Services is the operating advisor. The proceeds will refinance about $199.4 million of existing debt, and return about $46.3 million of cash equity to the sponsor.
Crescent Hotel Management Services will manage the resort hotel, while Sequoia Management Services will manage the golf course. Fitch considers the asset a high-quality one, with six golf courses totaling 99 holes, including the
Six golf courses totaling 99 holes, including a The Champion course, which has staged a RyderCup, a PGA Championship, 19 Senior PGA Championships and 17 Honda Classic tournaments. Some 60,000 square feet of event space, a 35,000-square-foot fitness center, a 40,000-square-foot spa, plus food and beverage establishments and a private membership club are among the property's amenities that lend a "B+" property rating from Fitch.
PGA National Resort's Brookfield sponsorship and the location of the securing properties are the deal's strong points from a credit perspective, but Fitch also believes a few points warrant caution. The borrower will take an approximately $46.3 million cashout, another is that the loan is interest only for the entire loan term, which exposes it to higher refinance risk. Another is the deal's single asset concentration, and its exposure to single-event market risk.
Fitch expects to assign 'AAA' to the $127.3 million, class A notes, with a credit enhancement level of 49%; 'AA-' on the $24.7 million, class B notes; 'A-' on the class C notes; 'BBB-' on the class D notes; 'BB-' on the class E notes; and 'B+' on the HRR notes. All of the notes have a rated final May 2033.
