HKB Hotels Group, the hotel management company of HKB Investments Group, secured $73.5 million in a CMBS refinance loan, which includes $59 million in portfolio refinancing for six Hyatt Places hotels in Alpharetta, Ga; Charlotte; Dallas; Greenville, S.C.; Roanoke, Va.; and Topeka, Kan.
The financing also includes a $14.5 million mortgage for the Best Western Plus Aku Tiki in Daytona Beach, Fla. Mag Mile Capital arranged the transaction. Other terms and conditions were not disclosed.
Seven assets were financed with two separate large international investment banking institutions. “These transactions closed in under 45 days from start to finish showcasing our team’s prowess of working on large and complex transactions with many different moving pieces. This was possible because of our deep relationships and mutual trust with some of Wall Street’s largest investment banks built over years of closing many transactions successfully” Rushi Shah, CEO of Mag Mile Capital, said in a statement.
The $59 million allocated to the Hyatt Place portfolio was tailored to deliver optimal leverage and favorable terms, positioning the client for substantial growth across multiple premier markets. The proceeds were used to retire a high-priced bridge loan that was used to acquire the assets. The hotels in this portfolio represent strategic assets located in key business and leisure destinations. Both transactions featured five-year, interest-only payments allowing the sponsor to maximize cash flow during the loan term. Additionally, Mag Mile’s team negotiated a structure that also included a unique feature of ability for the sponsor to opt out of cash management in case of reduced cashflow during the loan term.
HKB Investments Group purchased the Hyatt Place assets while they were in receivership. Mag Mile Capital had also arranged the acquisition bridge and the renovation loan at the time of purchase of the portfolio in 2022. HKB implemented the business plan by investing close to $30 million in capital expenditure among the six hotels, bringing their total cost in the assets to be over $90 million. This financing will allow the sponsor to decrease their interest rate by over 3 percent per annum and provide some additional capital to renovate some of the lobbies and remaining capital improvements for the Hyatt portfolio.
HKB’s Best Western Plus at Daytona Beach also recently underwent an extensive renovation program after the hurricanes. Best Western Plus also has a brand-new seawall at the back of the hotel paid for in full of capital expenditures by HKB Investments Group. Biggest challenge in closing a CMBS loan for this asset was that it had operational gap in the trailing twelve months of historic performance, but lender was able to underwrite a full trailing twelve months of cash flow using aggressive assumptions.
“These closings were important part of the lifecycle of these deals for HKB platform’s growth," said Prem Patel, COO of HKB Investment Group. "Mag Mile Capital’s team was the key difference maker in the outcome of these deals. They worked seamlessly with our team to deliver results. Rushi and his team worked around the clock to ensure deadlines were met and quality checked our team’s work to ensure a favorable outcome. We are already excited to work on the next large transaction with Mag Mile Capital."