Starwood Property Trust announced the co-origination, with an affiliate of Fortress Investment Group LLC, of a $285m on a portfolio of 123 Red Roof Inn Hotels totaling 14,585 rooms in 29 states. The loan is sponsored by a joint venture between Five Mile Capital Partners LLC and Westmont Hospitality Group.
The Loan upsizes and extends a $275m debt package Fortress provided to the sponsors in August of 2011 to acquire the portfolio. Starwood purchased the $185m A-Note on the initial loan. The current loan is a 50%-50% pari-passu structure, with both lenders sharing economics through the last dollar of debt. The sponsors plan to use the capital to continue to upgrade the properties.
Starwood and Fortress affiliates securitized a $200m senior A-Note to increase their investment returns and retained equal portions of the Loan’s related B-Note.
Red Roof Inn is an economy hotel chain with properties located throughout the United States.
