Three Korean brokerages lend $330 mn on US hotels, resort

Meritz Securities Co. Ltd. has extended a senior loan of $229 million on two new hotels in Nashville, which marked the third biggest construction loan in the capital of Tennessee over the past five years.

Separately, Hana Financial Investment Co. Ltd. and Mirae Asset Daewoo Co. Ltd. provided a $100 million financing on a Las Vegas resort development by taking over the mezzanine tranche from JPMorgan, according to local media reports last week.

Sources with knowledge of the matter confirmed them.

For the Nashville hotel project, Meritz underwrote the whole debt tranche of the $353.5 million financing which included equity tranches.

The three-year debt was the biggest construction loan in Nashville in the last five years, after a $360 million loan by a Canadian lender on a commercial property development and a $280 million loan on a skyscraper by a British fund, South Korean news provider edaily said.

An affiliate of Starwood Capital Group, Crescent Real Estate LLC and High Street Real Estate Partners announced on April 2 that they were developing the two hotels: a 30-story Embassy Suites by Hilton Hotel and an 18-story 1 Hotel, Starwood Capital Group's brand hotel.

They are located across the street from Nashville’s Music City Center, a convention center, which is expected to generate demand for the new hotels with 721 rooms.

Groundbreaking for the development is expected during the second quarter of this year.

Meritz will sell down the debt to domestic institutional investors. The projected return of around 5% from the senior debt is likely to attract insurance companies rather than pension funds, edialy cited an investment banking source.

LAS VEGAS RESORT

For the Drew Las Vegas, an uncompleted resort and casino on the Las Vegas Strip, Hana Financial and Mirae Asset provided financing of $85 million and $15 million, respectively. JPMorgan sold the mezzanine tranche to the two South Korean brokerage companies.

The funding came after Mirae Asset Daewoo and NH Investment & Securities Co. Ltd. extended a subordinated loan of $150 million for the resort project last year, along with the $100 million mezzanine tranche offered by JPMorgan.

No further details on the funding were available immediately.

The reportedly $2.5 billion resort project is scheduled for completion in 2020. It was stalled in 2009 in the wake of the global recession.

New York developer Steve Witkoff purchased the unfinished 60-story property in August 2017 for $600 million from Carl Icahn and has been working with Marriott International to rebrand the nearly 4,000-room resort.

By Hyunil Lee

hiuneal@hankyung.com

(Photo: Getty Images Bank)