RLHC (Red Lion Hotels Corporation) announced that its subsidiary, RL Baltimore, entered into a $13.3-million mortgage loan from PFP Holding Company IV, an affiliate of Prime Finance, to refinance the purchase capital for its previously acquired Hotel RL Baltimore Inner Harbor. Subsequent to the loan agreement, RLHC completed a joint venture agreement selling an initial 21 percent equity stake in RLS Balt Venture, the parent to RL Baltimore, to Shelbourne Falcon Charm City Investors. The loan and the joint venture agreement recapitalize the original purchase of the property by RL Baltimore and provide additional funds to complete the final renovations for this adaptive reuse project, which is on schedule to open in early August 2015.
RLHC maintains a 79 percent interest in RLS Balt Venture, with the remaining 21 percent purchased for $2 million by Shelbourne, an entity led by Shelbourne Capital and including Falcon Investors, among other institutional real estate investors.
Approximately $10.1 million in loan proceeds were funded initially with another $3.2 million available to complete the renovation of the hotel. RLHC expects to complete a second equity sale as Shelbourne has the option during the remainder of 2015 to purchase an additional 24-percent interest in RLS Balt Venture for approximately $2.3 million.
"This is phase one of the dual-phase recapitalization of Hotel RL Baltimore," said RLHC President & CEO Greg Mount. "This first investment by Shelbourne Capital and Falcon Investors is a testament to their continued commitment and support for this project and for the strategic direction of RLHC. When the hotel opens in August, it will be the first East Coast location and the first Hotel RL to open this year."
"This redevelopment project is among the most promising in the region," said Jason Ladavac of Shelbourne Capital. "The Hotel RL branding concept is ideal for Baltimore's Inner Harbor. The location is in a top metro area and is a great fit for RLHC's newest upscale concept, Hotel RL. We are pleased to continue to partner with RLHC in attractive hotel investments as the company pursues its rapid expansion to establish a national footprint."
RLHC purchased the 70 percent completed adaptive reuse project in December 2014. This location will become the first Hotel RL to open since the upscale conversion brand was introduced in fall 2014. Three Red Lion Hotels in Olympia, Salt Lake City and Spokane are also undergoing renovations to convert to Hotel RL and are scheduled to open under the banner in the first quarter of 2016.
Located in downtown Baltimore, the Hotel RL Baltimore Inner Harbor, 207 East Redwood Street, is known locally as The Keyser Building, a 10-story historic property with a cut-stone façade. Hotel RL Baltimore is within walking distance of Camden Yards and M&T Bank Stadium and is two blocks from the famous Inner Harbor, which has water taxis that ferry passengers to Fells Point, Canton and Fort McHenry. As part of the renovation, the design elements of Hotel RL will be incorporated into the property and the hotel will have 600 square feet of technologically advanced meeting space, an exercise room and a business center.