Beverly Hills, CA (October 24, 2023) — Sonnenblick-Eichner Company has arranged first mortgage financing for The Lodge at Tiburon and Toll House Hotel Los Gatos.
The 5-year non-recourse floating rate loan pays interest-only for the entire term and provided proceeds to pay off a maturing loan. The new loan also provided for a SOFR floor of 3.75% equating to approximately 155 basis points below the SOFR index at closing allowing the borrower to realize a lower cost of capital if interest rates decline.
The 104-room The Lodge at Tiburon and the 115-room Toll House Hotel Los Gatos are boutique hotels located in downtown Tiburon, a coastal town with unobstructed views of the San Francisco Bay and downtown San Francisco, and one of the wealthiest communities in the nation. Tiburon, located in Marin County, attracts over 1 million visitors annually. Los Gatos, known as Silicon Valley’s Gateway City, benefits from its proximity to San Jose which features over 10 million square feet of office space. Nearby companies include Apple, Netfilx, ebay, and Google.
“We were successful in placing the loan with a lender who understood the intrinsic value of the real estate in these high barriers to entry locations, evidenced by the lender’s going-in debt yield of approximately 7.5%,” said Elliot Eichner, a Principal of Sonnenblick-Eichner Company.
“Our client asked to see the entire market for both fixed and floating rate loan alternatives. Despite the headwinds associated with Northern California hotels, we procured 21 loan quotes on this transaction,” added Patrick Brown, also a Principal of Sonnenblick-Eichner Company.
