Long Slog, But Gaslamp Hotel Underway
A new addition to the longish list of new Downtown hotels: the 317-room Pendry San Diego, a Montage-branded hotel in the Gaslamp, three blocks from the convention center. (It's always a risky spot. Everyone knows the American Association of Dentists loves to party hard.) “It’s one of the final remaining gems in the Gaslamp Quarter,” George Smith Partners principal Malcolm Davies tells us, but it’s been a long slog to get it out of the ground, including construction financing that took more than a year. Ultimately, developer Robert Green Co and Montage secured $95M in financing, with a capital stack that included both debt and equity. The secured non-recourse financing closed at a 70% loan to cost, with a 36-month term.
Given the location, financing seems like it should have been a slam-dunk, says Malcolm, who worked to obtain construction financing for the development. But the lingering economic downturn, along with the fact that the development is a part of a 99-year ground lease, made finding the right capital provider tricky. Downtown's rebound can also be measured by the wave of hotels underway: the 400-room, two hotel Lane Field property (a SpringHill Suites and Residence Inn in one building), the 154-room Fairfield Marriott, and the Harbor View Hotel, which will incorporate parts of the Fat City restaurant building.