Attended by more than 8,000 Asian American hoteliers ready to lock in long-term, fixed-rate hotel loans before interest rates head upward, the annual Asian American Hotel Owners (AAHOA) Trade Show in San Diego, California, was a huge success, according to Michael D. Sneden, Executive Vice President at ValueXpress.
“We had a significant amount of inquiries from clients looking to complete cash-out refinancing of their hotel properties,” commented Jay Bhakta, Senior Loan Originator at ValueXpress. “Many owners were looking to use the cash-out proceeds to complete Property Improvement Plans (PIPs) required to renew franchises. For example, some noted that it could easily cost $1-$2 million to complete the new ‘Formula Blue’ PIP required by IHG for the renewal of Holiday Inn Express franchises. CMBS conduit loans with their unrestricted cash-out provisions are ideally suited for hotel properties requiring expensive PIPs so owners do not have to come out of pocket to pay for them.”
“In addition, we had requests for portfolio loans in which the owner gets one loan secured by a portfolio of properties, consolidating a variety of local lenders into one loan, converting recourse loans into non-recourse and obtaining cash-out proceeds for additional investments,” noted Sneden.
“In one case, the owner wanted to build a new Hampton Inn property, but his local community bank wanted cash equity of 35%, or nearly $3 million, invested in the $8-million project. The owner had only $2-million cash on hand, so we are going to provide a $1-million cash-out on a Holiday Inn Express owned by the sponsor,” noted Bhakta.
To obtain competitive proposals for your next CMBS conduit loan, contact Mike Sneden at email@example.com, Dennis Suh at firstname.lastname@example.org or Jay Bhakta at email@example.com.