KSL Capital Partners has obtained $553 million in financing for a 23-property U.S. hotel portfolio, its second major hospitality refinancing this fall. The new financing package consists of a $440 million senior mortgage loan and $113 million in mezzanine debt originated by Wells Fargo and Bank of Montreal via the KSL 2025-MH commercial mortgage-backed securities transaction.
Portfolio and market context
The 23 hotels in the refinanced portfolio total 3,028 guest rooms across 13 states and operate under Marriott, Hilton, and Hyatt flags in the select-service and extended-stay segments. Georgia is the largest state exposure with four hotels and 554 rooms, while the single largest asset is the 230-room Hampton Inn & Suites Myrtle Beach Oceanfront in South Carolina, which represents 9.6% of portfolio cash flow and 12% of the allocated loan amount.
The portfolio was acquired between 2021 and 2023, during which KSL invested $45.2 million in capital improvements, with an additional $31.4 million of brand-required upgrades planned over the loan term.
The financing closes against a softer U.S. hotel backdrop, where revenue per available room declined 2.1% in September, the steepest monthly slowdown since 2022 and the second straight quarter of RevPAR contraction. Demand growth has been limited, leaving operators with little pricing power, resulting in a 0.1% drop in September room rates and year-to-date rate growth of only 0.9%.
Equity position and recent transactions
Following the refinancing, KSL will retain approximately $184 million of equity in the portfolio. Recent appraisals prepared by Newmark’s Valuation & Advisory group in September concluded an aggregate “as-is” market value of $741.8 million for the individual properties in the portfolio. This latest transaction follows KSL’s $480 million refinancing in September for two luxury Hawaii resorts, a deal that released nearly $148 million of equity from the Outrigger Reef Waikiki Beach Resort and Sheraton Kauai Coconut Beach Resort.
Taken together, the two recent refinancings exceed $1 billion and indicate lender and investor confidence in KSL’s hotel holdings, even as the broader lodging sector faces muted near-term growth.
