CHICAGO and SAN JOSE—Black Bear Capital Partners (BBCP), a subsidiary of Black Bear Asset Management, announced that it has arranged $27.5 million in hotel financing, which includes the acquisition of a corporate-owned Motel 6 hotel in San Jose, California. Black Bear Capital Partner’s Senior Managing Director Suraj Desai arranged both components of the financing package.
The recent transaction includes a one-year, $23.1 million floating-rate, non-recourse loan, with full-term interest-only payments, which represents a 75 percent LTV, to fund the acquisition of the Motel 6 hotel, totaling 204 keys, located in San Jose. The subject property is being sold by Blackstone, a global investment firm with over $230 billion of commercial real estate under management. The borrower is a private investor.
BBCP separately arranged mezzanine financing for the borrower. The one-year, $4.4 million fixed-rate loan structured a portion of proceeds to facilitate the acquisition of the San Jose hotel at 91.6 percent LTC.
Located on Fontaine Road, which runs parallel to U.S. Route 101 the hotel is six miles away from downtown San Jose. The hotel is in close proximity to the city’s key demand drivers including the San Pedro Square Market, Santana Row, SAP Centre, Paypal Park, and the headquarters for high-tech companies in Silicon Valley such as Apple, Facebook, Amazon, Google, and Adobe, among others.
“The property is in a prime location in San Jose,” said Desai, who works out of the BBCP office in Chicago. “Corporate-owned hotel assets are always a great purchasing opportunity for experienced hotel owner-operators. The leveraged one-year loan products will allow our borrower to maximize their equity contribution through cutting operational inefficiencies and increasing value through continued performance ramp up.”
BBCP has had a strong start in 2022 having closed numerous complex financing packages in excess of $300 million despite challenging market conditions. The firm, which has offices in New Jersey and Chicago, recently opened an office in Florida and continues to expand its national platform and market penetration.
With another $300 million currently in the pipeline, BBCP continues to ramp up its activity this year, having closed numerous financing packages in recent months on behalf of its clients nationwide, including New York, New Jersey, Pennsylvania, Ohio, Illinois, Arizona, Nevada, California, Florida, South Carolina, Minnesota, Georgia, Nebraska, Texas, Colorado, Indiana, and Connecticut.