Willkie Advises Goldman Sachs Mortgage Company on $1.85 Billion Secured Mortgage and Mezzanine Loans

November 14, 2012

Willkie assists Goldman Sachs Mortgage Company in a refinancing of hotels located in Hawaii and San Francisco.

As reported in the Wall Street Journal, on November 9 Willkie client Goldman Sachs Mortgage Company funded $1.85 billion of first mortgage and mezzanine loans secured by a portfolio of hotels owned by Kyo-ya Hotels & Resorts, LP, a subsidiary of Kokusai Kogyo K.K., a Japanese company, which is jointly owned by foreign and domestic funds, accounts and other entities controlled or managed by Cerberus Capital Management, L.P and/or Cerberus Real Estate Capital Management, LLC (55%) and Kokusai Kogyo Holdings K.K., an entity owned and controlled by Mr. Takamasa Osano and his family members and/or affiliated entities (45%).

These loans refinanced the portfolio comprised of: the Sheraton Waikiki, the Westin Moana Surfrider, The Royal Hawaiian and the Sheraton Princess Kaiulani, each located in Honolulu; the Sheraton Maui Resort & Spa, located in Lahaina, Hawaii; and, The Palace Hotel, located in San Francisco. The portfolio of hotels includes three of only seven hotels located on Waikiki Beach (Sheraton Waikiki, The Royal Hawaiian, and Westin Moana Surfrider), which comprise over 33% of the total rooms inventory located directly on Waikiki Beach.

Cerberus is a global private equity firm founded in 1992 and dedicated to distressed investing since its inception. Cerberus has over US $20 billion under management invested in four primary strategies: (i) distressed securities and assets (mortgage-based securities, corporate debt, non-performing loans, structured loans), (ii) private equity, (iii) commercial middle-market lending and (iv) real estate-related investments. Headquartered in New York City with affiliate and/or advisory offices in the United States, Europe and Asia, Cerberus is a global investor with a long-term investment horizon and focus on value creation. Cerberus’s more than 130 investment professionals are integrated across all four of its investment strategies, bringing considerable expertise in assessing, acting upon and managing all Cerberus investments.

Among the Willkie attorneys assisting Goldman Sachs in this cross-borders transaction were partners Steven Klein, Michael Zinder and David Drewes, of counsel Michael Petronio and Peter Allman, associates Steven Rosenzweig, Cindy Yellen, Owen Reidy, Edward Dix, Joshua Deason, Ruchi Patel, Richard Choi, Dan Kozusko, Alessandro Turina and Michael Ispass, and senior staff attorney Michael Jackowitz.