Brookfield Asset Management is entering the commercial mortgage-backed securities market to fund the acquisition of three high-market luxury hotel properties.
According to pre-sale reports, the Canada-based alternative asset manager is securitizing $ 166.01 million of a $ 255.4 million mortgage loan through Bank of America Merrill Lynch to secure the issue of seven classes of debt and the proceeds for the purchase of the hotel portfolio.
Brookfield is also providing $ 62.1 million in debt and $ 102.4 million in sponsorship capital to complete the $ 414 million award.
Hotels include the InterContinental Hotel Buckhead Atlanta with 422 keys, the Sofitel Washington DC Lafayette Square with 237 keys, and the Kimpton Palomar San Diego with 211 keys. The hotels are managed by separate property managers (IHG Management, Accor Management and Kimpton Hotel & Restaurant Group).
Sofitel Washington D. C. Lafayette Square
All three hotels had previously been securitized in other conduit transactions between 2006 and 2016. The previous loans to the hotels were kept up to date and never transferred to special servicers.
The Kroll Bond Rating Agency is applying an expected AAA rating to its Class A senior notes totaling $ 46.3 million.