A developer who founded one of the largest U.S. home builders has secured construction financing to build a $282 million JW Marriott hotel in Walt Disney World in Orlando that is scheduled to open about the same time as a new Star Wars attraction.
Dwight Schar, founder of home builder NVR Inc., of Reston, Va., has borrowed $218 million for the 516-key hotel and resort project scheduled to open in 2019. About $147 million of that came in the form of a first loan from Arkansas-based Bank of the Ozarks Inc., one of the country's most aggressive construction lenders.
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There was also a million junior or "mezzanine" loan of about $71 million made by Brevet Capital Management, a New York finance firm. The rest of the capital for the JW Marriott Bonnet Creek is in the form of equity from a private firm led by Mr. Schar.
The hotel, managed by Marriott International Inc., is expected to open the same year that Walt Disney Co. plans to open a 14-acre attraction at Disney World named Star Wars: Galaxy's Edge. It will give visitors the opportunity to do such things as participate in an interstellar mission and experience a battle inside a starship hangar bay.
"Disney is moving ahead with all the technology that's available," said Kevin O'Grady, a managing director of Walker & Dunlop, which arranged the construction financing along with SRF Ventures Inc.
Construction financing remains difficult to find in today's commercial real-estate market even as debt for acquisitions becomes more plentiful. "One year ago it was hard to find construction loans for hotels. Today they're still hard to find," said Mr. O'Grady.
Still, competition among lenders for the Marriott deal was healthy. Mr. O'Grady said there were "three serious contenders" for the senior loan and five firms that vied for the mezzanine piece.
One reason why: The visitor occupancy levels and room rates are "off the charts" in Disney World, he said.
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(END) Dow Jones Newswires
August 01, 2017 16:57 ET (20:57 GMT)