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1/27/22
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In a large financing deal, S.D. Malkin Properties has secured a $265 mil refi on a 387-key, master-planned beach resort in Oceanside. The resort includes the 161-key Mission Pacific boutique hotel and The Seabird Resort, a 226-key full-service resort.
Completed in May 2021, the adjacent world-class design-oriented hotels are located on a premier 2.75-acre, two-block site spanning 700 feet of beachfront real estate. Operated by Hyatt, both hotels offer ocean views, direct beach access, an entire ecosystem of food and beverage experiences, interior meeting and function space, two pools with views of the Pacific, and access to some of the best surfing on the California coast. The site also features the historic 1887 beach cottage featured in the Top Gun movie, which will open soon as a nostalgic dessert bar.
Mission Pacific and Seabird have easy access to the historic Oceanside Pier and downtown cultural attractions, such as the Oceanside Museum of Art and the California Surf Museum. They play an important role in continuing the transformation of downtown Oceanside into the iconic destination that it once was in the early 20th century. The hotels are located four minutes from Interstate 5, connecting the properties with local and regional guests throughout San Diego, Orange, Riverside and Los Angeles counties. Amtrak’s Surfliner and Metrolink with links to Los Angeles and Orange County are less than two blocks away.
The properties’ beach front location is a significant barrier-to-entry given strict zoning constraints and the lack of entitled and developable oceanfront land in Southern California. The hotels are further bolstered by the strong lodging market fundamentals in San Diego. San Diego has continually proven to be a top-tier lodging market, supported by a diversified base of lodging demand from group business, leisure demand centered upon the world-renowned beaches, exclusive sporting venues and various theme parks and a well-established corporate base in the life science, technology and defense sectors.
The floating-rate, interest-only loan was arranged by Timothy Wright and Director Olga Walsh of JLL Capital Markets, in coordination with the JLL Hotels & Hospitality. It was funded through ACORE Capital.
The JLL team has been involved with the project since inception and arranged construction financing for the resort in 2018. Proceeds from this refinance were used to retire that construction facility, including a significant mezzanine loan. The new loan will provide cost savings, term and flexibility for the sponsor.
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