Wells Fargo Syndicates Westin Diplomat Loan
By Damian Ghigliotty October 8, 2014 5:25 pmreprints
Wells Fargo has syndicated a $260 million senior loan it provided to Thayer Lodging Group Fund VI and Brookfield Asset Management for a joint-venture acquisition and renovation of the Westin Diplomat Resort & Spa, in Hollywood, Fla., Mortgage Observer has exclusively learned.
Wells Fargo completed the syndication this week with three participating lenders, which the San Francisco-based bank declined to name. Michael Brown of the bank’s real estate syndication team under Wells Fargo Securities led the transaction.
The bank’s hospitality finance group, headed by Christopher Jordan, provided the balance sheet loan to the borrower on August 27, the same day the acquisition closed, with an initial term of three years and two one-year extension options. The deal carries a loan-to-cost ratio of 48 percent.
“Pricing is variable and set over Libor,” Mr. Jordan told MO. “The loan is subject to other structural provisions such as a renovation reserve, prepayment conditions and property financial covenants.”
Blackstone Group provided a $100 million mezzanine loan to coincide with the loan from Wells Fargo, increasing the total debt stack to $360 million, he said.
The new owners acquired the 998-room beachfront resort at 3555 South Ocean Drive, a neighboring 18-hole golf course and surrounding parcels of land for $535.5 million from a pension fund controlled by United Association, a 370,000-member plumbers and pipefitters union based in Annapolis, Md. The cost of the hotel property alone was $460 million.
The transaction marks one of the most expensive real estate deals in the history of South Florida, The Miami Herald reported at the time of the sale.
The Diplomat, which sits on nearly 10 acres of land, first opened as a luxury resort in 1959.