NEW YORK—The New York City office of Mesa West Capital has originated a $55-million mortgage loan to refinance the Hilton Crystal City, a full-service hotel in Arlington, VA.
The JBG Companies acquired the hotel adjacent to the Ronald Reagan National Airport in 2012. JBG, which has 12 full-service hotels in the metropolitan statistical area, completed a renovation of the property in September 2013. Improvements included extensive upgrades to the 393 guestrooms, lobby, and meeting space, as well as adding a new executive lounge and six new studio suites.
Following the renovation, both occupancy and ADR have improved at the property, according to Mesa West Capital Assistant VP Daniel Tanner, who originated the financing.
“JBG and manager Crescent Hotels and Resorts have taken the necessary steps to capture an increasing share of an improving hospitality market in the greater DC metro,” said Tanner. “Our loan will give them the runway to continue to capitalize on the work they’ve started and continue to do there.”
Hotel occupancy in Washington DC/Maryland/VA increased 7.3% over the fourth quarter of 2014, the largest increase among the top 25 hospitality markets in the U.S., according to data from STR, Inc.
The non-recourse, floating-rate interest only loan included an initial term of three years with extension options.
This is Mesa West’s second financing on a JBG-owned hotel and its fourth in the DC metro this year. In March, the Los Angeles-based balance sheet lender provided JBG with $27 million in first mortgage debt to refinance the 191-room Westin Reston Heights in Reston, VA.
The financing was arranged by Nicholas Seidenberg and Michael Zelin of Eastdil Secured.