HFF arranges $33.5M financing for Hampton Inn in Manhattan’s Herald Square

NEW YORK, NY – The New York office of HFF (Holliday Fenoglio Fowler, L.P.) has arranged $33.5 million in financing for the Hampton Inn 35th Street, a recently-completed, 147-room hotel in Manhattan’s Herald Square.

(Prior under-construction photo, top right)

Working exclusively on behalf of MMG-35 LLC, HFF senior managing director Jay Marshall (middle left photo) placed the five-year, fixed-rate loan with Cigna Investments.

Financing proceeds were used to acquire the property, which was part of a portfolio of three hotels.

The hotels were pre-bought approximately 12 months ago with the titles changing hands upon receipt of the Certificate of Occupancy.

The Hampton Inn 35th Street is a 20-story, full-service hotel that opened for business in October 2008. Located at 57 West 35th Street, the property is between 5th and 6th Avenues close to Pennsylvania Station and Grand Central Station in Midtown West Manhattan.

“The Hampton Inn 35th Street is perfectly positioned to appeal to both business and leisure travelers. It is located close to the Midtown Manhattan office market as well as tourist spots such as Times Square, the Theatre District, Rockefeller Center and shopping along Fifth Avenue,” said Marshall.

CONTACTS:

Jay B. Marshall, HFF Senior Managing Director, 212 245 2425, jmarshall@hfflp.com

Laurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990, lmcdowell@hfflp.com

Acadiana Centre in Friendswood, TX Obtains Financing

HOUSTON, TX – The Houston office of HFF (Holliday Fenoglio Fowler, L.P.) announced has arranged financing for Acadiana Centre, (bottom left photo) a 39,463-square-foot retail center in Friendswood, Texas.

HFF managing director Tucker Knight (bottom right photo) and real estate analyst Brad Ballard worked exclusively on behalf of Matthew G. Dilick, president of Commerce Equities, to secure the fixed-rate loan through Michael Peery of Enterprise Bank. Loan proceeds were used to retire existing debt.

Acadiana Centre is located at 400 West Parkwood and is shadow anchored by HEB in the southeast Houston suburb of Friendswood.

The property was originally completed in 1997 as a single-tenant retail center and was renovated in 2007 for multi-tenant use. Currently, Acadiana Centre is 96% occupied.

Commerce Equities, Inc. is a full-service real estate development, construction and property management organization that has overseen the development, completion and management of more than $400 million in multifamily, residential, hotel, retail and industrial real estate projects.

CONTACTS:

Tucker S. Knight, HFF Managing Director, 713 852 3500, tknight@hfflp.com

Laurie Fish McDowell, HFF Associate Director, 617 338 0990, lmcdowell@hfflp.com

Arbor Closes Three Loans Valued at $9.4M

Sebring Apartments in Houston, TX Obtains $4,699,500 Fannie Mae DUS® Loan

UNIONDALE, NY, Nov. 20, 2008-- Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of a $4,699,500 loan under the Fannie Mae DUS® product line to finance the 204-unit complex known as Sebring Apartments (top right photo) in Houston, TX.

The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.58 percent. The loan was originated by Matt Norman, (top left photo) Vice President, in Arbor’s full-service Dallas, TX lending office.

“There were several major hurdles to overcome in closing this loan on terms for the client – including the after-effects of Hurricane Ike, which swept through the area during the underwriting process,” said Norman.

“Arbor, in conjunction with the Broker and the Buyer, were able to maneuver through these hurdles, and meet the client’s ultimate goal of property acquisition.”

Cliffside Terrace in Ithaca, NY Gets $2.136M Fannie Mae DUS® Loan

UNIONDALE, NY, Nov. 20, 2008-- Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of a $2,136,000 loan under the Fannie Mae DUS® Small Loans product line to acquire the 36-unit complex known as Cliffside Terrace in Ithaca, NY.

The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.46 percent.

The loan was originated by Stephen York, (middle right photo) Director, in Arbor’s full-service Uniondale, NY lending office.

“This was our fourth transaction with this Sponsor, which emphasizes the importance we place on repeat clients,” said York. “Arbor was pleased to deliver competitive terms, which included 80% LTV.”

Americana Apartments in Greenville, TX Receives $2.601M Fannie Mae DUS® Small Loan

UNIONDALE, NY, Nov. 20, 2008-- Arbor Commercial Funding, LLC (“Arbor”), a wholly-owned subsidiary of Arbor Commercial Mortgage, LLC, announced the recent funding of a $2,601,900 loan under the Fannie Mae DUS® Small Loans product line to refinance the 120-unit complex known as Americana Apartments in Greenville, TX. (bottom left photo)

The 10-year loan amortizes on a 30-year schedule and carries a note rate of 6.56 percent.

The loan was originated by Peter Blass, (bottom right photo) Director, in Arbor’s full-service New York, NY lending office.

“The borrower was able to buy out his partners and re-structure the ownership with the proceeds of this transaction,” said Blass.

Contact: Ingrid Principe, Tel: (516) 506-4298, iprincipe@arbor.com

Global Hyatt Corp. 'BBB+' Rating Placed On Watch Negative

NEW YORK, NY--Standard & Poor's Ratings Services has placed its 'BBB+' corporate credit rating on Global Hyatt Corp. on CreditWatch with negative implications.

(Grand Hyatt Cairo, Egypt, top right photo)

"The CreditWatch listing reflects a worsening expectation in 2009 for revenue per available room in the U.S. at a time when Global Hyatt's leverage profile is weak for the 'BBB+' rating," said Standard & Poor's credit analyst Emile Courtney.

"Although the company does not publicly disclose its financial statements, we expect that year-over-year comparable EBITDA is likely to deteriorate at a pace that is in line with other lodging companies with a similar exposure to owned hotels and to the upscale and luxury lodging segments."

With business and leisure travel demand worsening and prospects for a long and moderate U.S. recession, we now expect that revenue per available room (RevPAR) in the U.S. in 2009 could decline in the mid-to-high single digits range, compared with our previous expectation for a decline of 5% or more.

(Cosmopolitan Resort & Casino, Las Vegas, NV, middle left photo)

Given current underperformance industry-wide in upscale and luxury price segments in the U.S., RevPAR for Hyatt's predominantly U.S.-based upscale and luxury portfolio could decline at a high-single-digits pace in 2009.

We stated in June 2008, when we revised the company's outlook to negative, that Global Hyatt may pursue a more aggressive financial policy of using debt to finance its strategic growth initiatives, and that this could result in downward ratings pressure if the U.S. lodging industry weakened further.

In resolving the CreditWatch listing, we will consider our outlook for the U.S. lodging industry and Hyatt's portfolio, as well as intermediate term expectations regarding management's growth strategies

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(Hyatt Montreal, Canada, bottom right photo)

Media Contact:
Mimi Barker, New York (1) 212.438.5054, mimi_barker@standardandpoors.com

Analyst Contacts:
Emile Courtney, CFA, New York (1) 212-438-7824
Liz Fairbanks, New York (1) 212-438-7459

Host Hotels & Resorts Inc. Outlook Revised To Negative On Worsening Revenue Expectations

NEW YORK, NY--Standard & Poor's Ratings Services has revised its outlook on Host Hotels & Resorts Inc. and Host Hotels & Resorts L.P. to negative from stable and affirmed the 'BB' corporate credit rating and all other ratings.

(Harbor Beach Marriott Resort & Spa, Fort Lauderdale, FL, top right photo)

The negative outlook reflects our worsening expectation for revenue per available room (RevPAR) in the U.S. next year and that Host's credit measures are likely to deteriorate more than we expected because of a higher year-over-year pace of EBITDA decline.

"With business and leisure travel demand worsening and prospects for a long and moderate U.S. recession, we now expect RevPAR in the U.S. in 2009 to decline to the mid- to high-single-digits," said Standard & Poor's credit analyst Emile Courtney, "compared to our previous expectation of a decline of 5% or slightly more."

Notably, given the current underperformance industry-wide in Host's predominantly upscale and luxury price segments, RevPAR for Host's portfolio of companies could decline at a high-single-digits pace in 2009.

(Scottsdale Marriott at McDowell Mountains, Scottsdale, AZ, top left photo)

Host's EBITDA in 2009 could decline by 15% to 20%, compared to our previous expectation of about 10%.

Host currently has some flexibility in credit measures--lease-adjusted debt to EBITDA of 4.5x (compared to our threshold level of 5x for the 'BB' rating), EBITDA coverage of interest and preferred dividends of 3.6x (above 2.5x), and debt to total capital of 55% (less than 60%), all as of the 12 months ended September 2008.

However, we are increasingly concerned that a decline in EBITDA of 15% to 20% in 2009 would result in measures that would be weak for the current rating.

At the end of 2009, we estimate that credit measures could be at or worse than the threshold levels: lease-adjusted debt to EBITDA could be in the mid-5x area, EBITDA coverage of interest and preferred dividends could be in the mid-2x area, and debt to total capital could be about 60%

(Coronado Island Marriott, San Diego, CA, middle right photo).

In addition, Host on Nov. 18, 2008, revised its guidance for comparable hotel RevPAR to a year-over-year decline of 9% to 11% for the December 2008 quarter and a decline of 3% for the full-year 2008, reflecting significantly slowing travel demand and a worsening economy.

Host gave no updated guidance for 2009.

The rating reflects Host's aggressive financial risk profile and, as a real estate investment trust (REIT), its reliance on external sources of capital for growth.

These factors are tempered by the company's high-quality and geographically diversified hotel portfolio of 117 owned hotels and more than 60,000 rooms (at September 2008), high barriers to entry for new competitors because of its hotels' locations (primarily in urban and resort markets or close to airports), its strong brand relationships, and its experienced management team.

(Denver Marriott West, bottom left photo)
Host's credit measures can move within a wide range over time, given the cyclical nature of lodging and the company's operating leverage, and we expect the current rating to hold, notwithstanding intermediate-term weakness in credit measures.

The negative outlook reflects the possibility of worse operating performance than we currently expect.

The negative outlook reflects our concern that a decline in EBITDA of 15% to 20% in 2009 would result in credit measures at or worse than our threshold levels for the 'BB' rating: lease adjusted debt to EBITDA could be in the mid-5x area (compared to our threshold level of 5x), EBITDA coverage of interest and preferred dividends could be in the mid-2x area (more than 2.5x), and debt to total capital could be in the 60% area (less than 60%).

(Hartford Marriott Rocky Hill, Hartford, CT, bottom right photo)

Driving our concern for Host's credit measures is worsening business and leisure travel demand and prospects for a long and moderate U.S. recession.

As a result, we now believe RevPAR in the U.S. in 2009 could decline in the mid- to high-single-digits range, and that Host's portfolio of hotels concentrated in predominantly upscale and luxury segments could experience a 2009 RevPAR decline in the high-single-digits area.

Also, we currently expect that Host would borrow modestly to fund regular and special dividends, although we believe share repurchases and opportunistic acquisitions would be minimal over the intermediate term.

We could lower the ratings if operating conditions worsen more than our expected 15% to 20% decline in EBITDA, or if Host borrows significant amounts to fund dividends, acquisitions, or share repurchases.

(New Orleans Marriott, bottom left photo)

The outlook could be revised back to stable if it becomes clear during the next several quarters that our 2009 EBITDA assumption proves too aggressive and there is a path toward sustainable recovery in the U.S. lodging industry.

CONTACTS:

Media Contact:
Mimi Barker, New York (1) 212.438.5054, mimi_barker@standardandpoors.com

Analyst Contacts:
Emile Courtney, CFA, New York (1) 212-438-7824
Liz Fairbanks, New York (1) 212-438-7459