Knighthead Funding Originates $61mil Loan to Refinance Dorado Beach, a Ritz-Carlton Reserve in Dorado Beach, Puerto Rico

USA, Greenwich, Connecticut. March 17, 2021

Knighthead Funding has provided a $61 million first mortgage loan secured by Dorado Beach, a Ritz-Carlton Reserve, in Dorado Beach, Puerto Rico.

The five-year, floating-rate, non-recourse loan from Knighthead Funding refinances maturing debt.

As the first Ritz-Carlton Reserve Hotel in the Americas and one of only five in the world, Dorado Beach, a Ritz-Carlton Reserve, is one of the most luxurious properties under the Ritz-Carlton Reserve flag. Opened in 2012, Dorado Beach, a Ritz-Carlton Reserve, is situated in the exclusive gated neighborhood of Dorado Beach, on the former Laurence Rockefeller estate, on Puerto Rico's Atlantic Coast. The ultra-luxury resort features 114 beachfront guest rooms and suites, and a five-bedroom, 8,600-square-foot, Presidential Villa.

Amenities include two championship golf courses, beach club, multiple swimming pools, four restaurants, five-acre botanical spa, fitness center, retail stores and 5,000 square feet of indoor and outdoor meeting spaces. The award-winning AAA Five Diamond beachfront retreat has been recognized as one of the best resorts in the world by Conde Nast and the Best Hotel in the Caribbean by U.S. News & World Report.

While the hospitality industry has been severely impacted by the pandemic, Knighthead's financing demonstrates that capital remains available for well positioned hotel assets with strong sponsorship, according to Knighthead Funding Principal Jonathan Daniel, who led the origination team from the firm's Greenwich, CT headquarters.

"Despite displacement and impact from external factors, the hotel has been able to maintain one of the highest average daily rates (ADR) in the region," said Daniel. "In its short history, the property has yet to reach its full potential. As market conditions start to improve, we project increases in both ADR and RevPAR, especially as high-end group business returns.


Dorado Beach, a Ritz-Carlton Reserve
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Tags: Knighthead Funding, finance, refinance, loan, financing, commercial real estate, real estate finance, hotels, hospitality, resort, Ritz-Carlton

About Knighthead Funding

Media Contact:

Bruce Beck
President
DB&R Marketing Communications, Inc.
T: +1 805-777-7971
E: bruce@dbrpr.com
W: http://www.dbrpr.com

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Revenue Management: Monetizing All Offerings


Of all the departments within hotel operations, Revenue Management may have been the hardest hit, due to the pandemic. The logic goes - no revenue, no need for revenue managers - so many industry professionals were furloughed. If business rebounds in 2021, as expected, then hotel management will have to determine when prevailing occupancy levels justify bringing back their revenue management team. Also, the pandemic seems to have exposed some weaknesses in the traditional RevPAR models. There is a growing understanding that it is no longer sufficient to use a "revenue per available room" model; instead, hotels are adopting a TRevPAR model (total revenue per available room). This model recognizes that revenue streams from other departments are just as important as the revenue gained from rooms. As a result, hotels are looking at ways to monetize any and all hotel offerings - from dining outlets and spas to outdoor function spaces and local partnerships. The October issue of the Hotel Business Review will examine these developments and report on how some leading hotels are executing their revenue management strategies.