Exclusive: Smith Hill, Bain Capital close $111M in financing for 4 hotels

NEW YORK — Smith Hill Capital and Bain Capital Special Situations have closed an approximately $111 million first mortgage for four Marriott and Hilton hotels in Arizona, California, Georgia and New Jersey.  

The 954-key portfolio includes the Marriott Bridgewater in Bridgewater, New Jersey; W Atlanta Downtown in Atlanta; Embassy Suites Walnut Creek in Walnut Creek, California; and Embassy Suites Flagstaff in Flagstaff, Arizona. 

According to other sources not involved in the financing deal, the seller was Dallas-based REIT Ashford Hospitality Trust and the buyer was Denver-based Stonebridge Hospitality Management.

The financing was originated and executed by the joint venture of Smith Hill Capital, the commercial real estate debt investment management business of Cranston, Rhode Island-based Procaccianti Companies and Boston-based Bain Capital. The JV was formed last year for hospitality assets in demand-driven markets.

Brendan McCormick, managing principal for Smith Hill Capital, told Hotel Investment Today that the buyer had significant cash equity along with the debt from the JV. JLL Hotels & Hospitality assisted with the transaction.  

“Our team’s deep understanding of the hospitality industry, combined with our partnership with Bain Capital, allowed us to structure a deal that met the needs of our borrower,” McCormick said. 

McCormick said the JV is “very active” and expects to announce another single-asset deal in the next few weeks. He said they have term sheets out on debt for multiple deals (some for acquisitions, while others are for refinances). Many of those refinancing deals are in the approximately $100 million range. 

He said the JV is expecting to place a few billion dollars in debt overall with a capital stack mix of first mortgage, preferred equity and mezzanine.