Northstar Hotel Portfolio

Location: Four Hotel Portfolio

Size: $54,350,000

Challenge: Deal Structure

Type: Capital Advisory

In 2011, our client had refinanced this portfolio with a $68.2 million CMBS loan and $37 million of preferred equity.  By late 2013, this portfolio’s NOI had increased, and our client wanted to access money for PIPs while lowering their interest rate.  We structured a new preferred of $54.35 million with one of the few institutions that truly understands the intricacies of preferred equity along with the tax issues.  The ultimate challenge of this deal was that the franchisors treated this transaction as a change of control while the CMBS servicers wanted a comfort letter indicating there was not a change of control.