$399.5m hotel loan closed in eight states.

David L. Babson & Co. Inc., an investment managed firm based in Massachusetts, announced that it has closed a $399.5 million deal to provide financing for a portfolio of 35 hotel properties across eight states.

The portfolio consists of Marriott, Hilton, Six Continents and Starwood brand hotels, including full service, extended stay and some limited service hotels.

The transaction is Babson's largest single-borrower real estate financing to date, eclipsing a $395 million financing completed in 2001.

Babson closed the deal following a competitive bidding process. While the initial funding of the loan is $345 million, the transaction provides the borrower with options to earn out additional advances up to $399.5 million. The loan is for an initial term of four year, with the option to extend for an additional year.

The borrower is comprised of subsidiaries of Sunstone Hotel Investors, LLC, based in San Clemente, California. In 1999, the senior management of the former REIT, Sunstone Hotel Investors, Inc., and Westbrook Partners completed a management buyout of the REIT and took the company private.

Westbrook Partners LLC is the sponsor and general partner of four separate real estate funds with total aggregate equity capital of nearly $4 billion.

The 35 hotels are located in California, Utah, Colorado, Arizona, Washington, Minnesota, Oregon and New Mexico.