NEW ORLEANS—A US$22.8-million senior leasehold bridge loan will go toward the renovation and reflagging of the 251-room Chateau Bourbon Hotel in New Orleans as a full-service Hyatt.
Canyon Capital Realty Advisors LLC provided the loan to HRI Lodging and Carey Watermark Investors. The renovation of the Chateau Bourbon, which originally was built in 1849 in the city’s French Quarter as the D.H. Holmes department store and converted to a hotel in 1995, will include a new lobby, lounge, redesigned guestrooms and a new “market” dining area.
The renovation of the property is expected to be complete before the 2012 summer travel season.
Canyon managing director Richard Bosworth declined to identify the deal’s specific underwriting terms.
“The level of the overall cost basis for the renovation is below recent market trades,” Bosworth said. He added that the borrowers brought “significant” equity to the deal.
The strength of the New Orleans market, along with its many diverse demand drivers, was a key factor in Canyon’s decision to do the deal, Bosworth said. Year-to-date through August, the market’s occupancy was up 0.7% to 66.4%, average daily rate grew by 5.2% to US$122.69, and revenue per available room increased 5.9% to US$81.52, according to data from STR, parent company of the Hotel Investment Barometer.
“New Orleans is a hot market,” he said. “It’s a very exciting and invigorating hotel market. It is a city that has a significant level of sellout nights.”
Contact:
Canyon Capital Realty Advisors LLC
Richard Bosworth, managing director
Email: rbosworth@canyonpartners.com
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