The InterGroup Corporation Announces Strategic Refinancing of Hilton San Francisco Financial District Hotel
The InterGroup (NASDAQ: INTG) has announced the successful refinancing of its subsidiary's Hilton San Francisco Financial District Hotel. The refinancing was executed through Justice Operating Company, , securing a $67 million mortgage loan with PRIME Finance at SOFR plus 4.80% interest rate, with an interest rate cap limiting SOFR exposure to 4.50%.
Additionally, Justice Mezzanine Company, modified its existing mezzanine loan with CRED REIT Holdco for $36.3 million at a fixed 7.25% annual interest rate. Both loans mature in two years with options to extend for three additional one-year periods, enhancing the company's financial flexibility and stability.
InterGroup (NASDAQ: INTG) ha annunciato il successo del rifinanziamento dell'hotel Hilton San Francisco Financial District, di sua proprietà. Il rifinanziamento è stato eseguito tramite Justice Operating Company, garantendo un prestito ipotecario di 67 milioni di dollari con PRIME Finance a un tasso d'interesse del SOFR più 4,80%, con un limite sul tasso d'interesse che limita l'esposizione al SOFR al 4,50%.
Inoltre, Justice Mezzanine Company ha modificato il suo prestito mezzanino esistente con CRED REIT Holdco per un importo di 36,3 milioni di dollari a un tasso d'interesse fisso annuale del 7,25%. Entrambi i prestiti scadono tra due anni con opzioni di estensione per ulteriori tre periodi annuali, migliorando la flessibilità finanziaria e la stabilità dell'azienda.
InterGroup (NASDAQ: INTG) ha anunciado el exitoso refinanciamiento de su hotel Hilton San Francisco Financial District. El refinanciamiento fue realizado a través de Justice Operating Company, asegurando un préstamo hipotecario de 67 millones de dólares con PRIME Finance a una tasa de interés del SOFR más 4.80%, con un límite en la tasa de interés que restringe la exposición al SOFR al 4.50%.
Además, Justice Mezzanine Company modificó su préstamo mezzanino existente con CRED REIT Holdco por un total de 36.3 millones de dólares a una tasa de interés fija del 7.25% anual. Ambos préstamos vencen en dos años con opciones de extensión por tres períodos adicionales de un año, mejorando la flexibilidad y estabilidad financiera de la empresa.
인터그룹 (NASDAQ: INTG)는 자회사인 샌프란시스코 금융 지구의 힐튼 호텔의 성공적인 재융자를 발표했습니다. 재융자는 Justice Operating Company를 통해 실행되었으며, PRIME Finance와 함께 6,700만 달러의 모기지 대출을 확보하였고, SOFR에 4.80%의 이자율이 적용되며, 이자율 한도가 SOFR 노출을 4.50%로 제한합니다.
또한, Justice Mezzanine Company는 CRED REIT Holdco와의 기존 메자닌 대출을 3,630만 달러로 수정하였으며, 고정 7.25%의 연 이자율이 적용됩니다. 두 대출 모두 2년 후 만기가 되며, 추가로 1년씩 3번 연장할 수 있는 옵션이 있어 회사의 재정적 유연성과 안정성을 높입니다.
InterGroup (NASDAQ: INTG) a annoncé le succès du refinancement de son hôtel Hilton San Francisco Financial District. Le refinancement a été réalisé par l'intermédiaire de Justice Operating Company, sécurisant un prêt hypothécaire de 67 millions de dollars avec PRIME Finance à un taux d'intérêt de SOFR plus 4,80%, avec un plafond d'intérêt limitant l'exposition au SOFR à 4,50%.
De plus, Justice Mezzanine Company a modifié son prêt mezzanine existant avec CRED REIT Holdco pour un montant de 36,3 millions de dollars à un taux d'intérêt fixe de 7,25% par an. Les deux prêts arrivent à échéance dans deux ans avec des options de prolongation pour trois périodes supplémentaires d'un an, améliorant la flexibilité et la stabilité financière de l'entreprise.
InterGroup (NASDAQ: INTG) hat die erfolgreiche Refinanzierung seines Tochterunternehmens, des Hilton San Francisco Financial District Hotels, bekannt gegeben. Die Refinanzierung wurde über die Justice Operating Company durchgeführt und sicherte sich ein Hypothekendarlehen von 67 Millionen Dollar mit PRIME Finance zu einem Zinssatz von SOFR plus 4,80%, wobei ein Zinssatzdeckel die SOFR-Exposition auf 4,50% begrenzt.
Darüber hinaus hat die Justice Mezzanine Company ihr bestehendes Mezzanine-Darlehen mit CRED REIT Holdco auf 36,3 Millionen Dollar zu einem festen jährlichen Zinssatz von 7,25% modifiziert. Beide Darlehen laufen in zwei Jahren aus, mit Optionen zur Verlängerung um drei zusätzliche einjährige Perioden, was die finanzielle Flexibilität und Stabilität des Unternehmens erhöht.
- Secured substantial refinancing totaling $103.3M for flagship hotel asset
- Interest rate risk protection through SOFR cap at 4.50%
- Flexible loan terms with 2-year maturity and three 1-year extension options
- Fixed rate of 7.25% on mezzanine loan provides predictable cost structure
- High interest rates: mortgage loan at SOFR+4.80% and mezzanine loan at 7.25%
- Increased debt load through refinancing may impact financial metrics
Insights
InterGroup's refinancing of the Hilton San Francisco Financial District represents a significant debt restructuring for a company with a relatively small market capitalization (
The financing structure follows standard hospitality industry practice with a senior mortgage and mezzanine debt, but several terms deserve attention. The mortgage loan's floating rate of SOFR+
The two-year maturity with three one-year extension options offers flexibility but also indicates this may be bridge financing rather than permanent debt. This structure allows InterGroup to avoid commitment to long-term rates if they anticipate better financing options becoming available or if they're planning additional restructuring of the asset.
Without disclosure of the previous loan terms, it's impossible to determine whether this refinancing improves cash flow through lower rates or extended amortization. However, the ability to secure institutional financing demonstrates lender confidence in the asset and management team, particularly relevant for a San Francisco hotel property where the hospitality market has faced challenges in recent years.
This refinancing transaction reveals several strategic considerations for InterGroup's flagship hotel asset. Securing
The involvement of Eastdil Secured as arranger is notable, as they specialize in institutional-grade transactions and typically work with premium assets. This suggests the Hilton San Francisco Financial District maintains competitive positioning within its market segment.
The financial structure employs sophisticated capital stack management typical of institutional hotel owners. The combined interest rate profile – floating-rate senior debt with a rate cap plus fixed-rate mezzanine financing – creates a partially hedged position that balances flexibility with predictability.
The relatively short two-year term with extension options indicates the company may be positioning for either a future sale or a more favorable long-term refinancing once property performance metrics improve. This approach allows InterGroup to avoid locking in current terms long-term while maintaining operational control.
For a modestly sized public company, executing this sophisticated financing demonstrates management's capabilities in navigating complex capital markets. The transaction appears to prioritize financial flexibility over immediate cash flow improvement, suggesting a longer-term approach to value creation for this key asset.
SAN FRANCISCO, CA, April 01, 2025 (GLOBE NEWSWIRE) -- The InterGroup Corporation (NASDAQ: INTG) ("InterGroup" or "the Company"), the parent company of Portsmouth Square, Inc. (OTC: PRSI) (“Portsmouth Square”), today announced the successful refinancing of its subsidiary's flagship asset, the Hilton San Francisco Financial District Hotel. This strategic refinancing positions the Company and its subsidiaries for improved financial flexibility and stability in managing their premier hospitality assets.
The refinancing was executed through Justice Operating Company, LLC ("Justice"), a wholly owned subsidiary of Portsmouth Square. Justice secured a
In addition, Justice Mezzanine Company, LLC another subsidiary of Portsmouth Square, has modified its existing mezzanine loan with CRED REIT Holdco LLC, obtaining a principal amount of
"This refinancing underscores InterGroup’s ongoing commitment to strategic financial management, enhancing financial stability and operational flexibility across our companies," said David Gonzalez, Chief Operating Officer of InterGroup. "Securing these agreements demonstrates our dedication to prudent financial stewardship and positions us favorably for continued growth and long-term value creation."
Further details of the refinancing transactions will be available in the Company’s forthcoming periodic report filings with the Securities and Exchange Commission (SEC).
ABOUT THE INTERGROUP CORPORATION
The InterGroup Corporation is a Delaware corporation formed in 1985, as a successor to Mutual Real Estate Investment Trust, a New York real estate investment trust created in 1965. The Company has been a publicly-held company since M-REIT's first public offering of shares in 1966 and currently trades on the NASDAQ Capital Market.
Contact:
David Gonzalez, COO
(310) 889-2559
FAQ
What are the key terms of INTG's new Hilton San Francisco hotel refinancing?
How has INTG protected against interest rate risk in the new refinancing?
What is the total refinancing amount secured by INTG for the Hilton San Francisco Financial District?
When do INTG's new Hilton San Francisco hotel loans mature?
