Natixis’ $265M Boston Hotel Refi Heads to CMBS Market
French bank Natixis will securitize its new $265 million refinancing on Extell Development’s InterContinental Boston hotel into the forthcoming NCMS 2018-SOX commercial mortgage-backed securities deal, according to rating agency documents.
Natixis originated the largest portions of the financing, a $110 million senior mortgage loan and a $65 million B-note, as Commercial Observer previously reported. KTB Asset Management, a South Korean mutual fund company based in Seoul, chipped in with senior and junior mezzanine loans worth $60 million and $30 million, respectively, from a pair of funds called KTB CRE Debt Fund Nos. 3-1 and 3-2.
Interest rates on the ten-year debt range from 4.8 percent on the A-note to 7.2 percent on the junior mezzanine loan, according to Morningstar Credit Ratings.
The waterfront hotel, at 510 Atlantic Avenue, overlooks Fort Point Channel, an inlet off Boston Harbor that historians believe was the site of the Boston Tea Party in 1773. Its 424 rooms occupy the bottom 12 stories of a 20-floor building, the upper portion of which houses luxury condominium units that don’t collateralize the loan. Also on site are 32,000 square feet of meeting space and a trio of restaurants that serve meals, snacks and cocktails.
The InterContinental Boston hasn’t been updated since it was built in 2006, but Extell plans to kick off a $21 million renovation of the property in December.
Last year, the lodging notched 83 percent occupancy, a figure that has grown in all but one year since 2012. Customers paid an average of $324 per night for rooms in 2017.
The new CMBS debt refinances a prior mortgage dating from the hotel’s construction 12 years ago. That debt, originated by Deutsche Bank, was securitized into the CD 2006-CD3 CMBS deal and matured earlier this month.
Representatives from Extell, Natixis and KTB did not immediately respond to inquiries.