New Disney Resort Scores $218M in Construction Financing

By Keith Loria

Kevin O’Grady, Walker & Dunlop

Walker & Dunlop has arranged $218.2 million in construction financing on behalf of DCS Real Estate Investments for the development of JW Marriott Bonnet Creek, a planned 516-key, luxury hotel and resort located in Orlando’s Walt Disney World.

“The sponsorship is exceptional, Marriott is best in class and the metrics of the deal provide for a very strong exit strategy of sale or refi on stabilized value,” Kevin O’Grady, Walker & Dunlop’s managing director of capital markets, told Commercial Property Executive. “For us, it’s right in our wheelhouse as we provide structured finance solutions to value-add platforms and development platforms.”

A successful partnership

The total capitalization of $218.2 million (77.3 percent) comprises both senior and mezzanine debt and was arranged by a partnership of Walker & Dunlop’s Miami capital markets team and SRF Ventures Inc., which is headed by Steven Fischler.

“My team executes a tremendous amount of construction financing nationwide with mezz debt below senior debt or preferred equity or common equity,” O’Grady said. “The sponsor executes transactions that either development opportunities or value-add that fit its skillset and is very adept at development.”

JW Marriott Bonnet Creek will be a 4.5-star luxury resort and boast 50,000 square feet of meeting and banquet space, a business center, luxury spa and fitness area and recreational facilities with a lazy river.

The project will be located nearby Magic Kingdom, Epcot Center, Blizzard Beach and Universal Studios, and there’s limited luxury hotel competition in the area.

“A full-service Marriott inside Disney with the other hotels already on campus offers another strategic product for the park and should draw tremendous occupancy with all the amenities offered in a Marquis,” O’Grady said.

Walker & Dunlop’s team also included managing directors Daniel Sheehan and Eric McGlynn. Throughout their careers, the team has closed more than $16 billion of debt and equity transactions.

The resort is expected to be finished by the fourth quarter of 2019.