German American Capital Corp Provides $80M Loan on Sofitel Chicago

Ashford Hospitality Prime, Inc. (NYSE: AHP) has funded its $153 million acquisition of the 415-room Sofitel Chicago Water Tower with proceeds from an $80.0 million non-recourse mortgage loan from German American Capital Corp. and proceeds from its January equity offering.

According to the loan agreement, a copy of which can be found by clicking here, the new $80 million mortgage loan bears interest at a rate of LIBOR + 2.30% and has a five year term, including extension options.

On a forward 12-month basis, the purchase price represents a cap rate of 6.8% on net operating income and an EBITDA multiple of 12.7x. In 2013, the Sofitel Chicago Water Tower achieved RevPAR of $182, with 82% occupancy and an Average Daily Rate of $222.

Located in the Gold Coast submarket of Chicago near the Magnificent Mile, the Sofitel Chicago Water Tower has 415 rooms, including 32 suites and one presidential suite. The hotel has more than 10,000 square feet of meeting space including a 4,592-square-foot ballroom, eight meeting rooms and a private dining room with open kitchen.

The hotel, home to restaurant Café des Architectes, was designed by French architect Jean-Paul Viguier. Its design has garnered the honor of being on the American Institute of Architects list of America’s Favorite Architecture.