Portsmouth Square Enhances Financial Flexibility with Refinancing

Portsmouth Square's Strategic Move for Financial Growth

Portsmouth Square, Inc. has taken a bold step towards ensuring its financial strength by successfully refinancing its key asset—the Hilton San Francisco Financial District Hotel. This strategic refinancing is not just a financial maneuver; it marks a new chapter of flexibility and stability for the company.

Refinancing Details and Future Outlook

The refinancing initiative was spearheaded through Justice Operating Company, LLC, a fully owned subsidiary of Portsmouth Square. They successfully secured a substantial mortgage loan of $67 million, thanks to the expert arrangement by Eastdil Secured, LLC, a prominent player in global real estate investment banking. The agreement sets a floating interest rate pegged to the 30-day Secured Overnight Financing Rate (SOFR) plus an additional 4.80%, offering a balanced approach to interest rate management. To mitigate risks associated with rate fluctuations, the company has proactively obtained an interest rate cap that limits SOFR exposure to a maximum of 4.50%.

A Flexible Financial Framework

Complementing this effort, another subsidiary, Justice Mezzanine Company, LLC, has also restructured its existing mezzanine loan with CRED REIT Holdco LLC, now standing at a fixed principal amount of $36.3 million with an attractive interest rate of 7.25% per annum. Both loans have a maturity period of two years, with options to extend for three additional one-year periods, granting Portsmouth Square the flexibility to adapt and grow based on market conditions.

Leadership's Vision Forward

David Gonzalez, the President of Portsmouth Square, expressed his optimism regarding this refinancing deal. He stated that "this refinancing is a significant step in our strategic financial management, ensuring favorable terms and financial stability." His remarks underscore the company's dedication to prudent financial practices while positioning itself favorably for future growth and sustained value creation.

Continued Commitment to Transparency

The comprehensive details surrounding these refinancing transactions will be disclosed in the company’s periodic reports to the Securities and Exchange Commission (SEC). This move reflects Portsmouth Square's commitment to maintaining transparency and building trust with its stakeholders.

About Portsmouth Square, Inc.

Founded in 1967, Portsmouth Square, Inc. is a recognized California corporation. The company stands out as a public entity under the umbrella of The InterGroup Corporation, which trades on NASDAQ under the ticker INTG. The primary operations of Portsmouth Square focus on the ownership of its flagship asset: the Hilton San Francisco Financial District, a notable 544-room hotel, which includes a highly functional five-level underground parking garage, enhancing the overall value of the property.

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

Frequently Asked Questions

What is the significance of the refinancing for Portsmouth Square?

This refinancing enhances Portsmouth Square's financial flexibility and stability, positioning it for future growth.

How much did Portsmouth Square secure in the refinancing?

Portsmouth Square secured a total of $67 million in a mortgage loan and $36.3 million in a modified mezzanine loan.

Who arranged the mortgage loan for Portsmouth Square?

The mortgage loan was arranged by Eastdil Secured, LLC, a leading real estate investment banking firm.

What is the maturity period of the loans?

Both loans have a maturity period of two years, with options to extend for three additional one-year periods.

What is the primary business of Portsmouth Square?

Portsmouth Square primarily conducts its business through the ownership of the Hilton San Francisco Financial District hotel.

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