The Mission Capital team of Gregg Applefield, Alex Draganiuk and Lexington Henn represented property owner SD Carmel Hotel Partners in securing the three-year loan from a private equity fund. The first-mortgage financing will replace the property’s renovation loan and a preferred equity loan.
After acquiring the property in 2014, the sponsor implemented renovations to the property, enhancing guestrooms, common areas, food-and-beverage outlets and meeting and spa facilities.
“In today’s market, it’s not uncommon for hoteliers to procure a ramp loan post-renovation prior to securing permanent financing, and the sponsor turned to us because of our extensive experience in this arena,” Applefield said in a statement. “Through a strong marketing effort, we were able to provide the sponsor with numerous competitive offers, including fixed-rate and floating-rate options with very high leverage for a hotel.”
The multimillion-dollar renovation includes remodeled guestrooms, a new dining concept – Asado Grill – and Black Horse Pub, a completely upgraded spa with fitness center and two upgraded pools with outdoor cabanas. Hotel Karlan also includes six distinct meeting spaces, totaling more than 14,000 square feet, as well as a pre-function space and an event lawn for weddings, musical performances and other social events. Additionally, the hotel has a 4,000-square-foot ballroom.
Located in the North County region of San Diego, the property is positioned in an area frequented by vacationers and corporate travelers. The North County area benefits from a corporate market driven by biotech and telecom businesses.
“With few comparable properties in the submarket, it was something of a challenge for lenders to quantify Hotel Karlan’s potential and underwrite a loan,” Draganiuk said in a statement. “It was critical, therefore, to convey the excellent track record of the hotel’s owner and its operator in repositioning and managing successful hotels.”
Laurus Corporation, a sponsor of SD Carmel Hotel Partners, is a real estate investment and development company that specializes in hotels and resorts, office buildings, multifamily and mixed-use properties. With more than $1.2 billion in assets under management, Laurus employs an entrepreneurial investment strategy designed to consistently achieve attractive risk-adjusted returns by creating capital appreciation opportunities through repositioning, restructuring, re-development and intensive post-acquisition asset management. The company was founded in 1999 by Andres and Jean Paul Szita, and is affiliated with Ethika Investments, a real estate private equity firm
Hotel Karlan is managed by San Clemente-based Evolution Hospitality, a seasoned hotel operator that currently manages 13 hospitality properties in San Diego.