Procaccianti Companies affiliate Smith Hill Capital launched a $1 billion private lending platform with Bain Capital in late 2023, and Smith Hill Managing Principal Brendan McCormick said the company's recent $111 million financing of a four-hotel portfolio is indicative of the types of deals they'd like to do more of.
Speaking with Hotel News Now at the 2024 NYU International Hospitality Industry Investment Conference, McCormick said Smith Hill is looking to be "very disciplined in this market," but he expects to see more deals sooner rather than later.
"We're seeing a lot of attractive opportunities at the same time," he said.
Smith Hill was initially launched in January of 2024 before the platform with Bain was launched in the latter half of the same year.
The company's most recently announced deal is the $111 million first mortgage financing of a four hotel, 945-room portfolio, including the Marriott Bridgewater, the W Atlanta Downtown, the Embassy Suites Walnut Creek and the Embassy Suites Flagstaff.
He said the deal reflects the fact that most of the requests coming across their desk are for first mortgages, but there is also demand for mezzanine and preferred equity.
"Most people want senior with first mortgage requests going up to 65%" loan to value, he said.
He noted one of the selling points for borrowers is Smith Hill "understands complex transactions, and we can offer the certainty of execution that sponsors are looking for in this market," he said, noting another deal is likely to soon be announced for a single asset at a smaller overall dollar value.
McCormick expects the deals pace to pick up and remain steady through the remainder of 2024.
"I think our expectations are we have a very active pipeline," he said. "We will remain disciplined, but we have term sheets out on other deals, and we're hoping to begin to transact on some other opportunities."
He noted the company's structure within the Procaccianti Companies is also an advantage, allowing them to "leverage off the already significant infrastructure."
"We're able to leverage resources from 50-plus years of owning, operating, developing hotels," he said. "That's helpful for underwriting opportunities and having significant market intel."