HKB Investment Group has landed a $73.5 million financing deal for seven hotels, marking the completion of a turnaround strategy that transformed the properties into premium-branded assets.
The financing package includes $59 million for six Hyatt Place hotels and $14.5 million for an oceanfront Best Western Plus property in Daytona Beach, Florida, said Mag Mile Capital, a mortgage investment firm that arranged the commercial mortgage-backed securities financing.
HKB used the proceeds to retire a high-priced bridge loan that was used to acquire the properties, Mag Mile said in its release. The new financing reduces HKB's interest costs by more than 3 percentage points annually compared to the bridge loan used for the initial acquisition.
Barclays is offering the $59 million Hyatt portfolio loan through a mortgage trust, BBCMS Mortgage Trust 2025-5C38, according to a filing with the Securities and Exchange Commission. The loan carries a fixed interest rate of 7.3%.
The Hyatt deal demonstrates how specialized hotel operators can extract value from distressed assets through operational expertise and strategic capital investment. Hari Bhagat, CEO of HKB, in a statement called the financing an "important part of the lifecycle" for HKB's growth.
HKB acquired the six Hyatt Place properties out of receivership in October 2022 for $55 million, according to CoStar data. The company invested about $30 million in capital improvements across the 754-room portfolio between 2023 and 2024. Renovations targeted guest rooms, public spaces and property systems at each location.
Appraisals for the properties backing the new loan now value the portfolio at $93.4 million, according to CMBS documents.
The Hyatt hotels are located in Dallas, Texas; Charlotte, North Carolina; Alpharetta, Georgia; Greenville, South Carolina; Roanoke, Virginia; and Topeka, Kansas. The Hyatt franchise agreements run through October 2042.
In addition, HKB's Best Western Plus Aku Tiki Inn at Daytona Beach also recently underwent an extensive renovation program. Work featured a new seawall at the back of the hotel, funded entirely by HKB.
The five-year loans feature interest-only payments, maximizing cash flow during the term.
Founded in 2016, HKB manages more than $500 million in commercial real estate across 50-plus properties.