Hilton Springfield, the 245-room, full service hotel in Springfield, VA valued at $49 million in early 2012, has seen its appraised value lowered to $27.7 million due in part to a 31 percent dip in room revenue, according to special servicer notes provided by Trepp.
A $25.9 million loan on the property was sent to a special servicer in May after its Debt Service Coverage Ratio (DSCR) fell to 0.46x in 2013.
The DSCR was 2.38x when the loan was originated in 2012.
“The good news is that the new value is still above the outstanding amount of the loan,” writes Trepp.
Built in 1978 and renovated in 2010, the property is located at 6550 Loisdale Road, which is just off Interstate 95, one exit south of the interchange with Interstate 495, about 11 miles south of the Pentagon. Amenities at the hotel include an indoor swimming pool and fitness center.
At the time of loan origination, the 12-story property included 7,814 square feet of banquet and meeting space and a 328-seat Houlihan‘s Restaurant and Bar operated by the borrower under a franchise agreement.
Loan documents say the Hilton Springfield property is owned and operated by affiliates of Coakley & Williams Hotel Management Company, which manages a portfolio of 26 hotels with approximately 4,000 rooms in 13 states and Washington, D.C.
Approximately 85 percent of the weekday business was reported to be defense contractor related, with demand generators including the Federal Government at Fort Belvoir, the National Geospatial Intelligence Agency, Defense Logistics Command, Customs, Coast Guard, and the Homeland Security Agency. Private demand generators included Accenture, Boeing Preferred, Booze Allen, Microsoft, Hewlett Packard, Lockheed Martin, Northrop Grumman, Raytheon, and SAIC.
The loan documents also say that eight competing hotels are located in the same market, although the Hilton Springfield property is the only full service hotel among them.
In 2011, the property reported an average occupancy of 69.4%, an ADR of $150.83, a RevPAR of $104.72, an occupancy penetration of 102.1%, an ADR penetration of 111.4% and RevPAR penetration of 113.8%.