CBRE Arranges $54MM in Financing for the Development of Two North San Jose Hotels

CBRE, San Francisco, San Jose, Bay Area, East Bay, CapitalSource, InfiniPower Hospitality Group, Johnson Hospitality, Huff Construction Company, Canyon Partners Real Estate

CBRE, San Francisco, San Jose, Bay Area, East Bay, CapitalSource, InfiniPower Hospitality Group, Johnson Hospitality, Huff Construction Company, Canyon Partners Real Estate

SAN FRANCISCO, CA – July 26, 2017 – CBRE Capital Markets’ Debt & Structured Finance team has arranged $54 million in construction financing for the development of two four-story, co-branded Marriott hotels. The properties will consist of a 147-room Marriott Residence Inn and a 114-room Fairfield Inn & Suites, and will be located in North San Jose, California.

The 60-month fixed and floating structured financing included $19 million in preferred equity from Canyon Partners Real Estate and approximately $35 million provided by the senior lender, CapitalSource.

John Nelson and Erik Franks of CBRE’s San Francisco office arranged the financing on behalf of the sponsorship, InfiniPower Hospitality Group. Johnson Hospitality, an experienced hotel manager, will manage the assets for the sponsors, and Huff Construction will serve as the general contractor for the project.

“Despite an extremely challenging capital markets environment for construction financing and particularly hospitality financing, we were able to attract numerous capital sources and secure a very competitive financing solution for the sponsors that provided the flexibility they needed,” said Mr. Nelson, executive vice president, CBRE.

The development site is located on America Center Court, contiguous to the America Center Office Park in “the Golden Triangle” area of Silicon Valley, and is bounded by Highways 237, 101 and 880.

Centrally located in the heart of Silicon Valley, one of the strongest hospitality markets in the country, the project will benefit from the hotbed of surrounding tech companies such as Cisco, Adobe and Hitachi. The project is also located within one mile from Levi Stadium and Great America Theme Park in addition to its proximity to the San Jose International Airport.

About Canyon Partners Real Estate LLC
Canyon Partners Real Estate LLC® (“Canyon”) is the real estate direct investing arm of Canyon Partners, LLC. Canyon focuses on providing debt and equity capital for commercial real estate in primary and secondary markets across the U.S., primarily to facilitate asset acquisition, value-add repositioning, development or recapitalization. Since inception, Canyon has invested over $6.3 billion of capital in over 250 commercial real estate and mortgage transactions with a total capitalization of $16.8 billion through its distinct real estate investment platforms. Founded in 1990, Canyon Partners, LLC is an investment management firm headquartered in Los Angeles which, together with its affiliates, manages approximately $22 billion of assets. For more information, www.canyonpartners.com.

About CapitalSource
CapitalSource makes commercial loans to small and middle-market businesses nationwide. CapitalSource is a division of Pacific Western Bank, a Los Angeles-based commercial bank with over $21 billion in assets and 74 full-service branches. Pacific Western Bank is a wholly-owned subsidiary of PacWest Bancorp (NASDAQ: PACW). For more information, visit https://www.capitalsource.com/cre17.

About InfiniPower Hospitality Group
InfiniPower was founded in 2003, and is engaged in investment and development of hospitality real estate properties. InfiniPower has successfully developed and owned SpringHill Suites by Marriott (95 rooms) hotel in Sacramento, CA since 2003. In August 2013, InfiniPower added Fairfield Inn & Suites by Marriott (104 rooms) hotel in Rancho Cordova, CA to its portfolio.

About Johnson Hospitality
Johnson Hospitality was founded in 1999 by Ron and Randy Johnson. They opened their first hotel in 2002 and currently hold equity or management interests in seven Marriott properties. Johnson Hospitality specializes in hotel management, development and equity investments with a focus on select service, branded hotels. They are actively seeking to expand their portfolio from the Western to Midwest regions of the United States. For more information, please visit www.johnsonhospitality.com.

About Huff Construction Company
Huff Construction has been providing quality general contracting services to the hospitality industry since 1971. For more information, www.huffcon.com.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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