Winston Hotels, Inc, a real estate investment trust (REIT) that owns premium limited-service, upscale extended-stay and full-service hotels, today announced that it has provided a $2.4 million mezzanine loan to finance the acquisition of a 200-room Sheraton Hotel in Atlantic Beach, North Carolina. The building will undergo extensive renovations, which are scheduled to be completed by June of this year. The all-in cost for the hotel, including the renovations, is estimated to be approximately $14 million.
The term of the loan is 5 years interest only with an interest rate based on 60-day LIBOR (with a 2.0% floor) plus 900 basis points plus accrued interest of 2.0% per annum of the outstanding principal balance.
“The Atlantic Beach Sheraton is an oceanfront hotel in a well-known resort area on the coast of North Carolina,” said Joe Green, Winston’s president & chief financial officer. Green added that, “The funding of this project is in line with our growth strategy of providing hotel loans to third party investors. We continue to seek additional opportunities, such as this one, where we can use our knowledge and funding capabilities to provide capital to the hotel industry.”
Raleigh, North Carolina-based Winston Hotels, Inc. is a real estate investment trust specializing in the development, acquisition, repositioning and active asset management of premium limited-service, upscale extended-stay and full-service hotels, with a portfolio increasingly weighted toward the leading brands in the lodging industry’s upscale segment. The company currently owns or is invested in 50 hotels with an aggregate of 7,059 rooms in 16 states, which includes: 43 wholly-owned properties with an aggregate of 6,054 rooms; a 49 percent ownership interest in two joint venture hotels with an aggregate of 296 rooms; a 57.65 percent ownership interest in one joint venture hotel with 157 rooms; and a 13.05 percent ownership interest in three joint venture hotels with an aggregate of 405 rooms. In addition, the company owns a 48.78 percent ownership interest in one joint venture that is developing a hotel with 147 rooms which we expect to open this summer. The company also has issued mezzanine loans to owners of three hotels with an aggregate of 391 rooms. The company does not hold an ownership interest in any of the hotels for which it has provided mezzanine financing.