The Sonnenblick-Eichner Co. has arranged $12.8 million worth of first mortgage acquisition and renovation financing for The Governor Hotel, a 100-room luxury hotel and historical landmark in downtown Portland, Ore., which is owned by Historic Hotel Partners of Providence LP, an affiliate of Grand Heritage Hotel Group.
Proceeds of the loan will go towards capital improvements, including the relocation and extensive renovation of the lobby, along with the restoration of the 10,000-sq. ft., 1900’s-era ballroom on the hotel’s fourth floor.
"We were successful in arranging a facility that provided maximum leverage while the property’s current cash flow is at a debt service coverage ratio below 1.0X. The lender underwrote the transaction based on improved future cash flows post renovation and improved performance, due to our client’s expertise in repositioning hotels," says Elliot Eichner, principal of Sonnenblick-Eichner.
uilt in 1909 and extensively renovated in both 1986 and 1991, The Governor Hotel is listed on the National Register of Historic Places. The property is a 6-story full service hotel with a restaurant and bar, meeting areas and a spa and wellness center. Located in the heart of Portland’s financial and retail central business district, the hotel has been awarded the "Four Diamond" rating by the American Automobile Association – one of only eight hotels in the state of Oregon to receive this designation.
"The lender was particularly well suited for this structured finance due to their depth of knowledge in hospitality operations and recognized the value-added potential represented by our client. Their flexibility in dealing with so many moving parts was key in choosing them to finance the property," says Patrick Brown, executive director of Sonnenblick-Eichner.