February 2, 2023

Madison Newbond Lends $72M on California Wine Country Hotels

Madison Newbond, a new institutional lending platform launched by Madison Realty Capital and Newbond Holdings last November, originated a $72 million loan for two newly built hotels in California’s wine country region, Commercial Observer has learned.

The debt package, provided to Stratus Development Partners, will be used to refinance existing construction debt on the 135-key Cambria Sonoma Wine Country and the 90-key Cambria Napa Valley hotels

Ackman-Ziff’s Firas Turkmani and Evan Linkner brokered the financing.

The joint venture partnership between Madison Realty Capital and Newbond is aimed at originating and purchasing hospitality loans across the U.S. It began with roughly $500 million of initial lending capacity. 

“California’s renowned wine producing regions have long been among the top destinations for both leisure and business travelers globally, and these two modern hotels, which are already cash flow positive, are well positioned to thrive as demand continues to rebound,” Josh Zegen, managing principal and co-founder of Madison Realty Capital, said in a statement. “We are pleased to continue building on our institutional lending platform and leveraging our deep industry relationships in partnership with Newbond to deliver creative and flexible lending solutions to hospitality owners and operators in attractive markets.”

Located at 5870 Labath Avenue in Rohnert Park, Cambria Sonoma Wine Country opened in August 2020. The hotel’s amenities include restaurant with bar, barista bar serving specialty coffee and flexible meeting space.

The Cambria Napa Valley at 320 Soscol Avenue in Napa debuted in August 2021. It features a two-story lobby along with a full-service restaurant and bar. 

Both hotels have a franchise agreement with Choice Hotels International and are operated by San Diego-based Azul Hospitality Group

Napa and Sonoma counties, which welcome more than 14 million annual tourists, have high barriers to local development approvals and rising construction costs with very few new competitive hotels in the works. Hotel occupancy in both  regions have made recent strides through, increasing 32 percent the last 12 months in Sonoma and 70 percent in Napa during the same period.

“We are excited to provide construction takeout financing for Stratus Development Partners, who were able to successfully build new hotels in Sonoma and Napa Valley, two regions with notoriously strict development regulations,” Neil Luthra, founding partner at Newbond, said in a statement. “Our partnership with Madison Realty Capital combines their institutional lending platform with our hospitality experience and we look forward to building the Madison Newbond platform by identifying and executing on new hospitality financing opportunities.”

Officials for Stratus Development Partners could not be reached for comment. 

Andrew Coen can be reached at [email protected]

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