Ashford Hospitality Trust, Inc. today announced it has closed on a $15 million mezzanine loan to a joint venture between Congress Group Ventures and The Buccini/Pollin Group on the Embassy Suites-Boston Logan Airport in Boston, Massachusetts. The loan bears interest at a rate of 1,025 basis points over LIBOR with a 1.75% LIBOR floor and interest only payments for the initial term. Maturing in March 2007, the loan provides for two one-year extension options with 1% extension fees. Ashford received an origination fee of 1%. The mezzanine loan is locked out on prepayment through September 1, 2005, and thereafter may be prepaid without penalty.
Financing on the Embassy Suites-Boston Logan Airport includes a first mortgage of approximately $32 million by Greenwich Capital and the $15 million mezzanine loan originated by Ashford.
The 10-story, 273-suite Embassy Suites opened in February 2003 and is located on Massport property abutting the grounds of Boston’s Logan Airport near the Ted Williams Tunnel entrance. It is also conveniently located one mile from downtown Boston and the new Boston Convention and Exhibition Center, which is expected to be completed in the second quarter of 2004 with 600,000 square feet of meeting space and 193,000 square feet of exhibition space. Developed on a 99-year ground lease, the hotel offers 8,000 square feet of meeting space, features 13 executive Boardroom suites and includes an indoor swimming pool, whirlpool and fitness center as well as complimentary high speed Internet access and airport and subway transportation. PM Hospitality Strategies manages the hotel property.
Commenting on the announcement, Monty J. Bennett, President and CEO of Ashford Hospitality Trust, stated, “Similar to the strategy we have applied with our mezzanine loan purchases, we wanted to ensure that this mezzanine origination enjoyed strong sponsorship, a proven brand and conservative underwriting. Congress Group Ventures and The Buccini/Pollin Group are very active, experienced developers and real estate investors with long track records. Their development represents the only upscale, all suite hotel at Logan Airport.”
Ashford Hospitality Trust is a self-administered real estate investment trust focused exclusively on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, first mortgages, mezzanine loans and sale-leaseback transactions. Additional information can be found on the Company’s web site at www.ahtreit.com.