Marriott Marquis in Houston secures $325 million refinancing

RIDA Development Corporation has entered into a major refinancing agreement for the Marriott Marquis Hotel in Houston.

The 1,000-key downtown hotel, located at 1777 Walker Street, received a $325 million mortgage, according to a report from Fitch Ratings. Goldman Sachs and Bank of America issued the loan and packaged it into commercial mortgage-backed securities to be sold to investors.

The two-year loan comes with a variable interest rate.

The mortgage will be used to refinance $320 million in existing debt and pay $5 million in closing costs.

The property was valued at $567 million, putting the loan-to-value ratio at 57 percent.

RIDA Development Corporation opened this upscale hotel in 2017. Among its amenities are a lazy river shaped like the state of Texas and a 5,000-square-foot spa. It’s also home to Houston’s largest ballroom, spanning 39,300 square feet, as well as eight food and beverage options.

The hotel is connected to the George R. Brown Convention Center by a skywalk.

Between 2019 and 2024, hotel revenue per available room increased by more than 8%. Additionally, the hotel is “prepared for an uptick in corporate demand,” according to Fitch Ratings.

The Marriott Marquis’ performance stands out in what has been called the nation’s “worst hotel market.” Houston earned the TREPP superlative last year due to low occupancy, high delinquencies and declining cash flow.

A March 2023 TREPP report indicated the city had more than $1 billion in hospitality loans and a 43% delinquency rate.

The Marriott Galleria in Houston also settled a $29 million loan loss last year. A few months later, the Crowne Plaza Houston Galleria Area recorded a loss on a $28 million loan.

Houston-based developer RIDA specializes in convention hotels, such as the Hilton Orlando, a 1,400-key hotel with access to the Orange County Convention Center.