A luxury real estate investment trust has closed on a $100 million mortgage loan secured by the newly purchased Four Seasons Resort Scottsdale, with going nightly rates of more than $1,500 a night, to pay off a more expensive loan tied to another swanky hotel property.
Braemar Hotels & Resorts Inc., based in Dallas, has secured the loan on the Four Seasons Resort Scottsdale at Troon North, a 37-acre, 210-room luxury hotel property at 10600 E. Crescent Moon Drive in Scottsdale, Arizona. The non-recourse, interest-only loan has a three-year initial term with two one-year extension options.
“We are very excited about our recent acquisition of the Four Seasons Resort in Scottsdale and are pleased to be able to finance this asset on favorable terms given the current volatility in the capital markets,” said Braemar's President and CEO Richard Stockton in a statement. “With this attractive new financing, we are able to reduce our weighted average interest rate across our borrowings by paying off a more expensive loan.”
The majority of the proceeds of the new loan are earmarked to pay off a more expensive loan secured by the Ritz-Carlton Reserve Dorado in Puerto Rico. According to CoStar's hospitality analyst, Braemar Hotels & Resorts bought the Scottsdale hotel for $267.8 million. In late 2021, the REIT also purchased the Ritz Carlton Reserve hotel in Puerto Rico in a $186.6 million deal. Braemar secured the Ritz-Carlton property with a floating interest rate loan totaling the London Interbank Offered Rate, plus 6%.
In addition to the Four Seasons Resort Scottsdale at Troon North, with adobe-inspired rooms set against dramatic valleys and views of Pinnacle Peak, Braemar also acquired 5.7 acres of land zoned for commercial development. In all, the deal totaled $267.8 million, the REIT said, with $250 million earmarked for the hotel property, or $1.2 million per room.
The hotel's amenities include a 9,000-square-foot spa, bi-level pool, two world-class golf courses, four pickleball courts and two tennis courts, as well as easy access to hike and bike trails, as well as rock climbing in the nearby hills.
For the Record
Robert Douglas, a hospitality-focused real estate advisory firm, helped Braemar in securing the loan.