Goldman Sachs Provides $430M CMBS Refi for Fairmont Austin Hotel

Manchester Financial Group had tried to sell the 1,048 room hotel last year for $600 million

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San Diego’s Manchester Financial Group has secured a $430 million commercial mortgage-backed securities (CMBS) loan to refinance its debt on Fairmont Austin, a 1,048-room hotel in downtown Austin, Texas. 

Goldman Sachs (GS) provided the five-year, interest-only CMBS loan that replaces a $300 million senior loan and $125 million in mezzanine debt, secured by the property’s sponsors in 2019. 

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Goldman Sachs is the sole bookrunner on the loan, which was originated by a JLL Capital Markets team of Tim Wright, Aldon Cole and Olga Walsh.

“With an influx of recently completed and ongoing construction projects in the immediate area, Fairmont Austin is well-positioned to benefit from the momentum in all directions and capitalize on its position as the epicenter of Austin’s explosive growth,” said JLL’s Wright in a statement.

The refinancing might come as a surprise, as only last year The Real Deal reported owner Manchester and its partner at the time, Colony Capital, had hired Eastdil Secured to market the 37-story, 1.4 million square-foot luxury hotel for a sale at a value of $600 million. 

For some context, the most expensive hotel sale in Austin’s history came in 2022 when Host Hotels & Resorts, a real estate investment trust, bought the Hotel Van Zandt from Kimpton for $246 million. 

Papa Doug Manchester, chairman of Manchester Financial Group, said in a statement that the refinancing will provide the “growth and enhancement’ of the hospitality property. 

“This significant financing, facilitated by JLL and Goldman Sachs, underscores our commitment to delivering exceptional hospitality experiences through our 100 percent ownership of the hotel,” said Manchester in a statement. 

Located at 101 Red River Street in the heart of downtown, the glass-encased Fairmont Austin opened in 2018 and immediately became the largest hotel in the city. Spanning more than 1.4 million square feet and standing 37 stories tall, Fairmont Austin is now the fifth tallest building in the city. 

The hotel’s amenities include a rooftop pool on the 7th floor overlooking the city and a 140,000 square-feet of space reserved for meetings, conventions, and events. Additional amenities include a full-service spa, five curated restaurants, and a grand pedestrian walkway that gives guests direct access to the nearby Austin Convention Center.

Brian Pascus can be reached at bpascus@commerialobserver.com