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9/13/23
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Cotton Court, a 165-room hotel in Lubbock, TX, was refinancing with a new fixed-rate, first mortgage for $21 mil. The financing was arranged by Sonnenblick-Eichner Company and funded by a Wall Street investment bank.
The upscale boutique hotel benefits from its excellent location in downtown Lubbock. It is one mile from both Texas Tech University, a campus with over 40,000 students, and Lubbock’s downtown Depot District, the central location of Lubbock’s thriving nightlife and social scene. The hotel is also located two blocks from the city’s convention center and is the closest hotel to the $158 mil Buddy Holly Performing Arts Center, which opened in 2021.
Cotton Court features a retro-aesthetic design with architectural elements inspired by Lubbock’s historic cotton industry. Amenities at the hotel include The Midnight Shift Restaurant and Bar, 4.5k sf of indoor meeting space and 20.8k sf of secure interior courtyard area featuring a swimming pool, pool bar, outdoor fireplaces and fire pits with seating throughout.
The non-recourse loan is interest-only for the entire term at an interest rate of 7.6%. A rate buydown was required by the lender to achieve this rate and proceeds.
“This interest only, fixed-rate refinancing allowed our client to pay off their bank construction loan, which was a floating rate SOFR- based facility with amortization, allowing for a tremendous increase in cash flow to the partnership as well as a significant return of capital from the development,” said David Sonnenblick, a Principal of Sonnenblick-Eichner Company.
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