The Peachtree Group originated $73 million in a construction loan and CPACE financing for the development of a 263-room dual-brand Home2 Suites (130 keys) and Tru by Hilton Hotel (133 keys) in San Diego, on behalf of Baxter Hotel Group, a San Diego‐based, vertically integrated real estate development and management company. Baxter plans to begin construction on its 16-story, dual-branded hotel this month and expects a 22-month construction timetable.
The Peachtree Group team originated a $50.4 million floating-rate construction loan over a three-year term and $22.6 million of fixed-rate commercial property clean energy financing amortized over 25 years, which in total represented 64 percent of the total development cost.
“We were able to execute an innovative capital stack with the addition of CPACE in an otherwise difficult financing market that provided ample capital for the construction to begin while saving the sponsor 200 basis points in interest rate spread,” Jared Schlosser, Peachtree’s senior vice president, head of hotel origination and CPACE, said in a statement.
The construction budget has CPACE-eligible items, including seismic improvements, lighting, building envelope, HVAC, plumbing and qualifying soft costs.
The hotel will cater to transient and extended-stay guests, offering a new product that has been historically underserved in the market, according to Peachtree. The high-quality amenities proposed are not typically seen in limited-service hotels, like sustainable designs to achieve Leadership in Energy and Environmental Design (LEED) certification, a ground-floor restaurant and a rooftop pool fully equipped with a restaurant and bar.