CRG inks Ramada mortgage as hotel market flourishes.

CRG Realty Capital announced the closing of a $22 million permanent mortgage on the LaGuardia Ramada Plaza Hotel in Corona, Queens.

The 217-room Ramada Plaza located one mile from LaGuardia Airport, across the street from Shea Stadium and the USTA Tennis Center, is the official hotel of the New York Mets. The hotel features Frankie & Johnny's Pine Restaurant, an indoor pool, fitness center, business center, and conference and banquet space.

According to CRG president Mitchell Adelstein, "The capital market responded very quickly and aggressively to this deal where spreads decreased by over 25 basis points before the final deal was awarded."

Due to a favorable business economy and relatively low hotel default rate, Adelstein explained that Wall Street has steadily increased their appetite for hotel loans. In fact, hotel loans in commercial mortgage backed security (CMBS) offerings have increased in the past three years from about 5% to 15%. "The ability of Wall Street to offer an interest-only period makes their deal that much more attractive," added Adelstein.

The financing, provided by Wells Fargo Capital Markets, was for 10 years with a five-year interest only period at a highly attractive rate of 60 over swaps. CRG was hired exclusively by Cromwell Hotels to secure financing for this hotel.

According to Wells Fargo director Doug Mazer, "It's a quality asset in a solid location backed by a very strong sponsor ... the deal is a good story all around. The New York hotel market is booming and this asset is no exception."

According to CRG vice president Ron Gershoni, "This year marks the third consecutive year of strong rate and occupancy (revpar) growth at the NY airport hotels, a trend we are seeing in other major American cities."

Gershoni explained, the strength of the economy has led to an increase in both business and leisure travel, a trend reflected by the increased appetite among lenders and investors for hotel product. "Given the aggressive underwriting required to win these deals, there has never been a better time for hotel owners to obtain attractive long-term fixed rate financing," he added.