Sotherly Refinances Florida Hotel

Mortgage & Real Estate

Sotherly Hotels Inc. has refinanced the Crowne Plaza Hollywood Beach Resort with a $57 million interest-only nonrecourse loan provided by Bank of America Merrill Lynch. Sotherly owns 25% of the Hollywood Beach, Fla., hotel in a joint venture with the Carlyle Group.

Proceeds were used to pay off the prior first mortgage and to make a distribution to the joint venture partners. Sotherly used $3.5 million of its share of the proceeds to repay Carlyle debt it owed related to the joint venture.

The new loan is indexed to the one-month Libor plus 395 basis points. It matures in January 2016, according to a press release from Sotherly.

But an 8-K filing from the company obtained via DisclosureNet.com says the loan has a three-year initial term plus two one-year extension options. If the first extension option is exercised, the interest rate jumps to the one-month Libor plus 420 bps. For the second extension, it is Libor plus 445 bps.

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