Portsmouth Square Completes Strategic Refinancing of Hilton San Francisco Financial District Hotel

Rhea-AI Summary

Portsmouth Square (OTC: PRSI) has successfully completed the refinancing of its Hilton San Francisco Financial District Hotel through two key transactions:

1. Justice Operating Company secured a $67 million mortgage loan with PRIME Finance at SOFR plus 4.80%, including an interest rate cap limiting SOFR exposure to 4.50%.

2. Justice Mezzanine Company modified its existing mezzanine loan with CRED REIT Holdco for $36.3 million at a fixed 7.25% annual rate.

Both loans mature in two years with options for three one-year extensions, enhancing the company's financial flexibility and stability in managing its flagship hospitality asset.

Positive

• Secured substantial $103.3 million total refinancing package
• Interest rate cap protection limiting SOFR exposure to 4.50%
• Flexible loan terms with 2-year maturity and three 1-year extension options
• Fixed rate of 7.25% on $36.3M mezzanine loan provides rate stability

Negative

• High interest rate spread of 4.80% over SOFR on primary mortgage
• Increased debt exposure through dual-loan structure

News Market Reaction

-5.47%

1 alert

-5.47% News Effect

On the day this news was published, PRSI declined 5.47%, reflecting a notable negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

SAN FRANCISCO, CA, April 01, 2025 (GLOBE NEWSWIRE) -- Portsmouth Square, Inc. (OTC: PRSI) ("Portsmouth Square" or "the Company") today announced the successful refinancing of its flagship asset, the Hilton San Francisco Financial District Hotel. This strategic refinancing positions the Company for improved financial flexibility and stability in managing its premier hospitality asset.

The refinancing was executed through Justice Operating Company, LLC ("Justice"), a wholly owned subsidiary of Portsmouth Square. Justice secured a $67 million mortgage loan agreement with PRIME Finance, arranged by Eastdil Secured, LLC a leading global real estate investment banking firm. The loan carries a floating interest rate equal to the 30-day Secured Overnight Financing Rate (SOFR) plus 4.80%, and to proactively manage interest rate risk, Justice has secured an interest rate cap, limiting SOFR exposure to a maximum rate of 4.50%.

In addition, Justice Mezzanine Company, LLC another subsidiary of Portsmouth Square, has modified its existing mezzanine loan with CRED REIT Holdco LLC, obtaining a principal amount of $36.3 million at a fixed interest rate of 7.25% per annum. Both loans mature in two years, with options to extend for three additional one-year periods, providing added flexibility.

"This refinancing is a significant step in our strategic financial management, ensuring favorable terms and financial stability," said David Gonzalez, President of Portsmouth Square. "Securing this agreement highlights our commitment to prudent financial stewardship and positions us well for continued growth and long-term value creation."

Further details of the refinancing transactions will be available in the Company’s forthcoming periodic report filings with the Securities and Exchange Commission (SEC).

ABOUT PORTSMOUTH SQUARE, INC.

Portsmouth Square, Inc. is a California corporation, incorporated in 1967. Portsmouth is a public company and is a consolidated subsidiary of The InterGroup Corporation (NASDAQ: INTG). Portsmouth's principal business is conducted through its ownership of the Hilton San Francisco Financial District, a 544-room hotel located at 750 Kearny Street, San Francisco, CA 94108, including a five-level underground parking garage.

Contact:
David Gonzalez, President
(310)889-2559

FAQ

What are the key terms of Portsmouth Square's (PRSI) new $67 million mortgage loan?

The mortgage loan has a floating rate of SOFR plus 4.80%, with an interest rate cap limiting SOFR exposure to 4.50%. It matures in 2 years with three one-year extension options.

How much is the mezzanine loan component in PRSI's hotel refinancing?

The mezzanine loan amounts to $36.3 million with a fixed interest rate of 7.25% per annum.

What is the total refinancing amount for PRSI's Hilton San Francisco Financial District Hotel?

The total refinancing package amounts to $103.3 million, combining the $67 million mortgage loan and $36.3 million mezzanine loan.

What is the maturity structure of PRSI's new hotel refinancing?

Both loans have a 2-year initial term with options to extend for three additional one-year periods.