Palladius, Marquee JV provides construction financing

Palladius Capital Management, a vertically integrated real estate investment manager focused on pursuing multifamily, student housing, hospitality and select thematic investment strategies, in joint-venture partnership with Marquee Funding Group, has originated a $11.5-million loan to finance the construction of the Cambria Hotel Hillsboro, a four-story, 115-key asset in Hillsboro, OR.

The fixed-rate loan carries a term of 24 months and is provided to sponsors Evergreen Hospitality Development, a Washington-based hotel developer and manager, and Fine Hotel Group, an Orange County, CA-based hotel management company.

“We are excited to provide this financing to two high-quality sponsors who understand the local market exceptionally well and have a sound business plan to own and operate a high-performing hotel supported by multiple demand generators,” said Afshin Kateb, CFO/head of hospitality investments, Palladius. “This transaction illustrates that during these volatile capital markets times, while most regional banks have materially reduced their lending capacity, we remain present and ready to lend to qualified projects. Our decades of experience owning, operating and financing hotels gave us great confidence in making this loan, and we look forward to contributing our knowledge to support the project’s success. This origination demonstrates our unique ability to structure bespoke financing solutions that are beyond the capabilities of other lenders.”

The 22,000 sq.-ft. upscale hotel will be constructed on land that is owned by Majestic Realty Co., which is adjacent to Majestic Brookwood Business Park, a master-planned 118-acre commercial development in Hillsboro’s business sector. Hillsboro, the fifth largest city in Oregon, has been dubbed “Silicon Forest” given the area’s heavy tech presence. Companies like Intel, Adobe, McAfee, Salesforce and Nvidia call the area home. The market also houses other major employers, including Nike’s global headquarters, Applied Materials and Thermo Fisher Scientific, among others. The hotel will also benefit from its proximity to the popular Orenco Station neighborhood, an award-winning transit-oriented community that features a diverse collection of retail shopping and popular restaurants.

Commenting on Palladius’s views on the hotel market, CEO Nitin Chexal stated, “We are firm believers in the long-term fundamentals supporting well-located hotels. We pay close attention to hospitality real estate and have been investing in it for years; we plan to be an active lender on a national scale on projects that meet our investment criteria. Recovery within the hospitality sector has been extremely market—and in some cases submarket—specific, as widely varying demand drivers create disparate impacts on regional and local hospitality ecosystems. In this case, the Hillsboro market demonstrates robust leisure demand and is beginning to show signs of recovery in business travel.”