ValueXpress has arranged a $13.8-million CMBS conduit loan for the refinance of two franchised hotels located in Indianapolis and Scottsburg, Indiana. The Hampton Inn – Scottsburg is a 4-story, 86-room hotel constructed in 2000.
The hotel is located 80 miles south of Indianapolis and 30 miles north of Louisville, Kentucky on I-65. A portion of the loan proceeds will be utilized to complete a Forever Young Initiative (FYI) property improvement plan in conjunction with a 15-year franchise renewal.
The Staybridge Suites – Indianapolis/Fishers is a 4-story, 146-room extended stay hotel constructed in 2000. The hotel is in the highly desirable neighborhood of Fishers, 10 miles northeast of downtown Indianapolis. This property is in the final stages of a property improvement plan related to a franchise renewal.
“The transaction was one of the most challenging ever completed by ValueXpress,” commented Dennis Suh, Senior Vice President, who arranged the transaction. “The refinancing extinguished a loan maturity default and property bankruptcy for the Hampton Inn, and we defeased the Staybridge hotel to provide the proceeds for the Hampton property improvement plan,” commented Suh.
The bankruptcy occurred to keep the property out of receivership, but created significant hurdles in getting the new loan approved. “I structured around this concern by including cash management, seasonality reserves and property improvement reserves to ensure the properties were properly capitalized and the cash flow accounted for,” stated Suh. “The transaction proved that credit-blemished sponsors can be financed in CMBS if the loan is properly structured.”
If you have a CMBS transaction with a sponsor who has struggled in the past, contact Dennis at Dsuh@valuexpress.comto see if his structuring skills can result in a loan approval for you like this hotel portfolio transaction.