JLL secures financing for three of Texas’ largest hotels

DALLAS, Aug. 21, 2024 –  JLL Capital Markets announced today the successful refinancings of three large hotels in Texas: Sheraton Dallas, Marriott Marquis Houston and Fairmont Austin. These recent deals highlight JLL's expertise in navigating the debt market and demonstrate the robust growth of the Texas market.

In April, JLL advised Chartres Lodging Group on the refinancing of the Sheraton Dallas, the largest hotel in the Dallas-Fort Worth area as well as the state of Texas. The hotel offers 1,841 guestrooms, including 283 suites, over 230,000 square feet of flexible meeting space across 70 rooms and multiple food and beverage outlets. Sponsorship completed an $100 million renovation which enabled the asset to materially increase its performance and competitive positioning in the market. The JLL Hotels and Hospitality team arranged a $300 million floating rate loan which was comprised of a $270 million SASB CMBS loan originated by a syndicate led by Goldman Sachs, and a $30 million mezzanine loan originated by Driftwood Capital. The two-year, floating-rate loan includes three one-year extension options.

In May, JLL facilitated the $325 million loan to refinance the Marriott Marquis Houston, a 1,000-key, premier convention and leisure hotel in the heart of Downtown Houston, Texas. This property features a range of amenities including iconic rooftop pool known as the Texas Lazy River, in the shape of Texas, as well as an infinity pool, fire pits, a whirlpool, cabanas and daybeds. Additional amenities at the Marriott Marquis Houston include Pure Spa, a state-of-the-art fitness center and six on-site food and beverage offerings, including Biggio’s, Cueva and High Dive and Altitude bars. JLL represented RIDA Development Corporation to secure the five-year, floating-rate SASB CMBS term loan through Goldman Sachs and Bank of America.

In July, JLL represented Manchester Financial Group in securing a $430 million refinancing for the Fairmont Austin, the largest hotel in the city of Austin. This 37-story luxury hotel in downtown Austin features 1,048 keys, a full-service spa, five curated food and beverage outlets and an outdoor resort-style pool deck. JLL successfully arranged a five-year, interest-only fixed-rate SASB CMBS loan, with Goldman Sachs acting as the lead manager and sole bookrunner. This all-mortgage financing package replaced a $300 million senior loan and $125 million of mezzanine debt.

The JLL Capital Markets teams were led by Kevin Davis, Jeff Bucaro, De'On Collins, Mark DesLauriers, Alex Payne, Mark Huth, Barnett Wu, Caleigh O'Connell, Davis Burnett, Tim Wright, Aldon Cole, Olga Walsh, Doug Opalka, John Nugent, Robby Westerfield and Greyson Fewin.

"These successful refinancings are a testament to our ability to execute in a tough market and continue to make our presence felt in Texas," said Kevin Davis, JLL’s Hotels and Hospitality Group Americas CEO. "Texas remains a highly attractive market for hospitality investments, and these deals signify the ongoing growth and resilience of the Texas hotel industry."

As of H1 2024, the combined hotel investment volume in Austin, Houston and Dallas has surpassed pre-pandemic levels, reaching a total of $167 million. This represents an 18% increase compared to 2019 and an 8% increase compared to 2018. Hotel transaction activity is expected to continue rising in these markets as their fundamental performance improves, driven by the resurgence of group, business and international demand.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

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