Latest news: Finance for Kauai resort; Bally's merger; residences for Nevis

Financing for Kauai resort. Dallas-based alternative investment manager Civitas Capital Group has closed a $150 million senior loan to finance a 210-room hotel, Hale Malana, a Curio Collection by Hilton Hotels & Resorts, in Kauai, Hawaii, for Silverwest Hawaii Holdings, an established joint venture backed by affiliates of Silverwest Hotels, Blackstone Strategic Partners Real Estate VII, and a Goldman Sachs affiliate, The development is classified as "rural" under USCIS's definition of such projects, a designation desired by potential EB-5 investors. Situated on approximately 8.5 acres, within a master‐planned, 450‐acre oceanfront luxury resort community, Hale Malana will include a three‐meal restaurant, the pro shop for the 18‐hole Jack Nicklaus Ocean Course at Hokuala, an outdoor pool, 2,000 SF of interior meeting space along with substantial outdoor venues, and a fitness center. This will be Hilton's second branded hotel on the island. The sponsor is prepared to break ground in Q3 2024 and complete construction in Q3 2026.

Hampton for nearby Heathrow. Hilton has signed a franchise deal with Acre Hotels Ltd, part of the Westcombe Group, for the 157-room Hampton by Hilton London Heathrow Bath Road, marking the brand’s debut at Europe’s busiest airport. Two Westcombe Group companies – Westcombe Construction Ltd. and Acre Hotels Ltd. – will manage the construction and subsequent operation of the hotel.

DC Cambria to be reflagged. Cronheim Hotel Capital has arranged a $42.3 million acquisition loan for Frontier Development & Hospitality Group to acquire the 182-room Cambria Hotel Washington, D.C. Convention Center. Built in 2014 by Concord Hospitality, the hotel is situated with a half-mile of the Walter E. Washington Convention Center and features a rooftop gathering area. The borrower plans to overhaul the hotel and rebrand it to the Hyatt House flag. Other details of the renovation and loan underwriting were not disclosed.

Bally's merger. Bally’s Corp. has entered into a definitive merger agreement with Standard General L.P., the company’s largest common stockholder. Standard General will acquire Bally’s outstanding shares for $18.25 per Bally’s share, representing a 71% premium over the company’s 30-day volume weighted average price per share as of March 8, 2024. In lieu of receiving the cash consideration, Bally’s stockholders may elect to retain all or a portion of their Bally’s stock by means of a rollover election. The transaction values Bally’s at approximately $4.6 billion in enterprise value. The combined company will remain a publicly traded registrant. Pursuant to the merger, Bally’s will combine with The Queen Casino & Entertainment Inc, a regional casino operator with four casinos majority-owned by funds managed by Standard General. Standard General has obtained $500 million of committed financing to support the merger. The is expected to close in first half of 2025.

Residences for Four Seasons Nevis. Four Seasons Hotels and Resorts is expanding its residential portfolio at Four Seasons Resort Nevis, West Indies, in partnership with F.S.R. Estates Ltd. The partners are developing 58 new-build luxury residences set to welcome homeowners in 2025. Nevis Peak residences will offer one-, two-, and three-bedroom units ranging from1,725 to 3,730 square feet (160 to 347 square meters) over six low-rise buildings with four to ten villas in each.

Pebblebrook beats Street. Pebblebrook Hotel Trust beat the Street with better cost controls and incrementally higher business interruption income. It also reduced full-year RevPAR outlook, suggesting leisure customers remain price sensitive. Same-property revenues were up 2.5%; same-property EBITDA was $117.2 million (+9% YOY); expense growth was -0.1% (+1.4% excluding property taxes/insurance); and margins were +182 bps. Full-year earnings guidance is increasing to reflect the 2Q24 earnings beat, more business interruption income, and better La Playa performance. R.W. Baird noted that the lower RevPAR outlook does not have a material impact on earnings as Pebblebrook is expecting a corresponding reduction in same-property expenses.

AJ Capital refurbishing Bahamas resort. After being acquired by AJ Capital Partners earlier this year, Coral Sands Hotel on Harbour Island, Bahamas, has started a multi-phased restoration, initially focusing on revitalizing guest rooms and public spaces. The hotel includes 24 guestrooms, six bungalows, eight cottages, three four-bedroom residences, and two restaurants.

US RevPAR record. The U.S. hotel industry for the week ending July 20 reported higher performance results than the previous week and positive comparisons year over year, according to CoStar. From July 14-20, occupancy was 73.5% (+1% YOY); ADR was $165.91 (+2.4% YOY); and RevPAR was $122.02 (+3.4% YOY). The RevPAR level was the highest for any week on record. Among the Top 25 Markets, Houston saw the highest year-over-year increases in each of the three key performance metrics: occupancy (+29.6% to 82.2%), ADR (+20.3% to $135.65) and RevPAR (+56% to $111.49). The market’s performance was impacted by the effects of Hurricane Beryl. The steepest RevPAR declines were seen in San Francisco (-14.1% to $140.09) and Seattle (-12.4% to $195.52).

Egypt supporting hotel investment. Egypt has launched an initiative to support the tourism sector with government funding to quickly expand investment in building hotel rooms, as part of the initiative to support productive sectors, according to a statement issued by the Cabinet Wednesday. Under the initiative, the amount of credit available to each tourism company will be determined based on the size of its business and regulatory banking rules. The maximum financing for a single client and related parties will not exceed $20.68 million (1 billion EGP) or $41.37 million (2 billion EGP), through a maximum of two banks within the framework of the initiative. The government will allocate funds from the new tourism initiative, with a maximum of $1 billion (50 billion EGP), to companies operating in the tourism sector. These companies must obtain prior approval from the Ministry of Tourism and Antiquities to build and operate new hotel rooms, including expansions in existing projects or the acquisition of a closed building for conversion into a hotel facility. The funded rooms under the initiative will be in prioritized areas such as Luxor, Aswan, Greater Cairo, the Red Sea, and South Sinai, including Sharm El Sheikh, Taba, Nuweiba and Dahab.