KSL Capital Partners is preparing to close an $890 million refinancing of a 12-hotel portfolio across seven states and Washington, D.C.
The deal marks KSL's latest return to the commercial mortgage-backed securities market for hotel debt — and its largest to date.
The company's ability to repeatedly tap the CMBS market for increasingly larger hotel refinancings signals deep lender confidence in the firm's hospitality platform, even as the broader U.S. hotel sector faces headwinds.
Gross operating margins across major U.S. hotel markets continue to reflect an uneven recovery, with 2025 results highlighting a growing divide between top-performing cities and those still working to return to pre-pandemic levels.
Revenue per available room is projected to grow by only 0.6% in 2026, according to CoStar data. Softening demand, tariff costs and economic policy uncertainty all weigh on the lodging sector, according to a Morningstar DBRS report.
Yet KSL keeps securing fresh capital, a pattern that underscores how experienced sponsors with diversified, brand-affiliated hotel portfolios can still command investor appetite.
KSL did not respond to CoStar News' request for comment.
Growing stack of refinancings
The KSL portfolio being refinanced spans 2,290 hotel keys. It features marquee brands, including Marriott, Hilton and Hyatt, alongside independent boutique properties.
The majority of the current portfolio was also previously securitized through KSL Commercial Mortgage Trust 2023-HT and KSL Commercial Mortgage Trust 2024-HT2, according to Morningstar DBRS. The mortgage loan balance has grown from $444.2 million in the 2023-HT deal to $890 million in the current offering, a 50.3% increase.
In November, the Denver-based firm secured $553 million to refinance a separate 23-property, 3,028-room hotel portfolio through its KSL 2025-MH offering, CoStar News reported. Wells Fargo and the Bank of Montreal originated that transaction.
That deal itself followed a $480 million refinancing package KSL closed in September for two luxury Hawaii resorts — the Outrigger Reef Waikiki Beach Resort and Sheraton Kauai Coconut Beach Resort — that extracted nearly $148 million in equity.
Wells Fargo and Deutsche Bank's German American Capital are to co-originate the new CMBS loan and package it into an offering called KSL 2026-HT3, according to Morningstar DBRS. The deal is expected to close on June 15.
The $890 million floating-rate loan carries an interest rate of the Secured Overnight Interest Rate plus 3.1% with interest-only payments throughout. The initial term is two years with three 1-year extension options.
KSL will use proceeds to refinance about $779.2 million of existing debt, return roughly $52.2 million of equity to the sponsor, repay a $40 million corporate facility, fund a $9.7 million property improvement plan letter of credit and cover $8.9 million in closing costs, according to Morningstar DBRS.
New York leads portfolio
The portfolio is concentrated in high-barrier-to-entry urban markets. New York dominates, with five properties accounting for 38.7% of the allocated loan amount. Georgia follows at 14.4%, followed by Massachusetts at 11.8%.
The portfolio's largest assets are the 403-room Westin Savannah in Savannah, Georgia; the 294-room Westin Philadelphia in Philadelphia; the 207-room Hilton Garden Inn Midtown East and the 178-room Hyatt Union Square in New York; and the 136-room Envoy Hotel in Boston.
Newmark appraised the portfolio's individual properties at $1.18 billion as of April, equating to $516,550 per room.