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Marriott Marquis Houston – Photo credit Marriott International
JLL Capital Markets’ successful refinancings totaling over $1 billion demonstrate the booming hotel market in Texas
JLL Capital Markets recently announced the successful refinancing of three major hotels in Texas: Sheraton Dallas, Marriott Marquis Houston and Fairmont Austin. These recent closings underscore JLL’s expertise in navigating the credit market and demonstrate the robust growth of the Texas market.
In April, JLL advised Chartres Lodging Group on the refinancing of the Sheraton Dallas, the largest hotel in the Dallas-Fort Worth metropolitan area and the state of Texas. The hotel offers 1,841 guest rooms, including 283 suites, over 21,500 square feet of flexible meeting space in 70 rooms, and multiple food and beverage outlets. Sponsorship completed a $100 million renovation that enabled the hotel to significantly improve its performance and competitive position in the market. The JLL Hotels and Hospitality team arranged a $300 million floating rate loan comprised of a $270 million SASB CMBS loan originated by a Goldman Sachs-led consortium and a $30 million mezzanine loan originated by Driftwood Capital. The two-year floating rate loan includes three one-year extension options.
In May, JLL arranged the $325 million loan to refinance the Marriott Marquis Houston, a 1,000-room premier convention and leisure hotel in the heart of downtown Houston, Texas. This property offers a range of amenities including an iconic rooftop pool known as the Texas Lazy River, shaped like Texas, as well as an infinity pool, fire pits, a hot tub, cabanas and daybeds. Other amenities at the Marriott Marquis Houston include Pure Spa, a state-of-the-art fitness center and six on-site dining options including Biggio’s, Cueva and High Dive and Altitude Bars. JLL represented RIDA Development Corporation in securing the five-year, variable-rate SASB CMBS loan through Goldman Sachs and Bank of America.
In July, JLL represented Manchester Financial Group in securing a $430 million refinancing for the Fairmont Austin, the largest hotel in the city of Austin. This 37-story luxury hotel in downtown Austin features 1,048 rooms, a full-service spa, five select food and beverage outlets and a resort-style pool deck. JLL successfully arranged a five-year, interest-free, fixed-rate SASB CMBS loan, with Goldman Sachs serving as lead manager and sole bookrunner. This mortgage financing package replaced a $300 million senior loan and $125 million in mezzanine capital.
The JLL Capital Markets teams were led by Kevin Davis, Jeff Bucaro, De’On Collins, Mark DesLauriers, Alex Payne, Mark Huth, Barnett Wu, Caleigh O’Connell, Davis Burnett, Tim Wright, Aldon Cole, Olga Walsh, Doug Opalka, John Nugent, Robby Westerfield and Greyson Fewin.
“These successful refinancings are a testament to our ability to thrive in a challenging market and continue to make our presence felt in Texas,” said Kevin Davis, CEO of JLL’s Hotels and Hospitality Group Americas. “Texas remains a highly attractive market for hospitality investment, and these deals demonstrate the continued growth and resilience of the Texas hotel industry.”
As of the first half of 2024, combined hotel investment volumes in Austin, Houston and Dallas have surpassed pre-pandemic levels, reaching a total of $167 million, representing an 18% increase from 2019 and an 8% increase from 2018. Hotel transaction activity is expected to continue to increase in these markets as their underlying performance improves, driven by the revival of group, corporate and international demand.
