Nearly $24M Finances 213 Hotel Rooms

(To read more on the debt and equity markets, click here.)

THOUSAND OAKS, CA-Ocean Park Hotels of Valencia has landed financing of nearly $23.8 million for construction of a 120-room Courtyard by Marriott and a 93-unit TownePlace Suites here, according to Columbus, OH-based RockBridge Capital LLC. RockBridge, which provided the financing, says it funded 89.3% of the total cost, explaining that it “is comfortable going high into the capital structure when the opportunity and sponsor are strong.”Ocean Park Hotels, which owns and manages seven hotels, has another seven under development. The two properties financed by the RockBridge loan will be at 1710 and 1712 Newbury Rd. They will be part of a mixed-use development that will include a Chili’s Restaurant and a neighborhood retail center. James T. Merkel, managing director of RockBridge, cites high corporate demand in the Thousand Oaks lodging market from companies like Amgen, Baxter Pharmaceuticals, J.D. Power & Associates, Countrywide Financial and Verizon. In addition, barriers to entry are high as a result of a lack of developable sites and a very lengthy and expensive entitlement process, “which should limit future hotel projects,” he says. Merkel describes the Thousand Oaks hotel market as underserved. The Ohio-based company makes first mortgage, mezzanine, preferred equity, and equity investments, primarily in the hotel sector.In addition to the factors cited by Merkel, the Thousand Oaks hotel market benefits from a statewide trend in which the number of new rooms under construction dipped by 30% in 2004, according to a survey by Costa Mesa-based Atlas Hospitality Group. The number of new rooms under construction in Los Angeles County fell by 37.2% to 426 during 2004, and Atlas says the decline is part of an overall competition for development sites and a resulting slowing of construction is “very positive for existing hotel owners.” One of the main reasons for the slowing of construction is the lack of suitable hotel sites, especially in built-up areas, according to the Atlas report, which was issued earlier this year. In addition, the report notes that there is tremendous competition for development rights from other commercial property developers looking to develop retail and office projects.