Brookfield partially financing luxury hotel portfolio via MBS

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Brookfield Asset Management is tapping the commercial mortgage-backed securities market to finance its acquisition of three major-market luxury hotel properties.

According to presale reports, the Canadian-based alternative asset manager is securitizing $166.01 million of a $255.4 million first-lien mortgage loan via Bank of America Merrill Lynch to secure the issuance of seven classes of notes to secure proceeds for the purchase of the hotel portfolio.

Brookfield is also supplying $62.1 million in debt and $102.4 million of sponsor equity to complete the $414 million price tag.

The hotels include the 422-key InterContinental Hotel Buckhead Atlanta, the 237-key Sofitel Washington DC Lafayette Square and the 211-key Kimpton Palomar San Diego. The hotels will be managed by separate property managers (IHG Management, Accor Management and Kimpton Hotel & Restaurant Group).

All three hotels were previously securitized in other conduit transactions between 2006 and 2016. The prior loans to the hotels were kept current and never transferred to special servicers.

Kroll Bond Rating Agency is applying an expected AAA rating to the senior Class A notes totaling $46.3 million.

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