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March 29, 2024
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FINANCING NEWS
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Hotel Near Disneyland Lands $20 Mil Refi Loan

6/20/17

Continental Partners has secured $20.5 mil in fixed-rate, non-recourse refinancing for the Sheraton Garden Grove-Anaheim South Hotel, a 285-room hotel near the Disneyland theme park. The property consists of a 186k sf, seven-floor building on 3.1 acres.

The Sheraton Garden Grove-Anaheim South Hotel is located at 12221 Harbor Blvd in Garden Grove, approximately two miles away from the Disneyland Resort, which includes Disneyland Park, California Adventure, and Downtown Disney. Amenities include a first-floor lobby bar, lounge, and restaurant; an 8.5k sf indoor meeting space; business center; a 24-hour Sheraton fitness center; a shuttle service to the Disneyland Park; and an outdoor pool and spa.

The financing was arranged by Continental Partners President Mitch Paskover, who tells us that the money was used to refinance the hotel and pay off a mezzanine loan. The five-year, fixed-rate loan, priced in the low five-percent range, is sized to 65 percent of cost with a 30-year amortization schedule and a debt coverage ratio of 1.40.

“The Orange County hotel sector is experiencing remarkable growth and outperforming other U.S. markets,” notes Paskover. “Driven by a thriving tourism industry, the region’s hotel market continues to demonstrate annual RevPAR growth and occupancy rates that are above national averages. Based on these fundamentals, there is strong investment activity and sustained lender appetite for quality hotels with high average daily rates throughout Orange County.”

According to a report by CBRE, average daily rates in the Orange County market are projected to increase 3.5 percent in 2017. Market occupancies average 77%, far outpacing the national average of 65.4 percent.

“Orange County is one of the premier tourism destinations in the world, attracting millions of visitors every year,” continues Paskover, who notes that the Orange County Visitors Association reported a new record in tourism for the third straight year with over 48 million visitors in 2016. “Home to the Disneyland Resort and Anaheim Convention Center, this market is poised for continued ADR growth and strong lodging demand for years to come.”

Paskover adds that Disneyland announced a $1 billion, 14-acre expansion in its theme park, while the Anaheim Convention Center, one of the largest convention centers on the west coast, will add more than 200k sf of meeting space by the fall of 2017. These expansions will further drive tourist demand for hotels in this market, according to Paskover.






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