ValueXpress obtained an $11-million CMBS conduit loan for the refinance of a 119-room Hilton Garden Inn located in Pascagoula, Mississippi. The 5-story property was constructed in 2014 and is the number one-rated hotel in the Pascagoula market, according to TripAdvisor. The loan refinanced a construction loan that was utilized to construct the property. The new CMBS conduit loan will result in significant interest savings as the new interest rate is significantly lower than the construction loan rate.
Hilton Garden Inn – Pascagoula, MS
The hotel is located in Pascagoula, Mississippi, home to the state’s largest employer, Ingalls Shipbuilding, which is owned by Huntington Ingalls Industries. Other major industries in the area include the largest Chevron refinery in the world; Signal International, an oil platform builder; and Mississippi Phosphates. To help spur the construction of the hotel, the City of Pascagoula spent $2.5 million building roads as well as installing drainage, landscaping and lighting around the property.
“The transaction had a number of issues that needed to be resolved,” commented Gary Unkel, Senior Loan Originator at ValueXpress. “The most challenging issue was that part of the equity to construct the hotel was in the form of New Market Tax Credit financing (NMTC). This financing cannot be repaid until the summer of 2019 and is considered additional property debt, which is not allowed in CMBS. To solve the problem, I was able to get the CMBS lender to hold the loan until the summer of 2019, when it will then be pooled and sold. This is unheard of in CMBS. And our client was delighted as the existing loan was maturing and the client needed to close now.”
This transaction was arranged by Gary Unkel at ValueXpress. For your next CMBS conduit loan transaction, contact Gary at ValueXpress.