ValueXpress has arranged a $30-million permanent loan for the refinance of the Embassy Suites Hotel in Chattanooga, Tennessee. The transaction was orchestrated by Charlie Lobetti, who manages the ValueXpress office in Knoxville, Tennessee. The transaction provided for a cash-out return of equity to the sponsor to be utilized for other real estate investments. The transaction was completed through a southeastern regional community bank.
“Of our hotel transactions 90% are executed through the CMBS market,” commented Lobetti. “But we also maintain relationships with community banks throughout the United States and can close with those lenders when they provide the best execution for our clients.”
“The client preferred a non-recourse loan and a cash-out CMBS conduit loan would have been a perfect fit,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “However, a 70% Loan-to-Value (LTV) CMBS conduit loan did not provide sufficient cash-out proceeds to meet the client’s needs, so we turned to our community banking partners. The transaction was structured with a 5-year term and a 25-year amortization schedule. The loan proceeds represents 83.3% LTV.”
“The borrower was very happy with the results of this transaction,” said Lobetti. “Normally community banks are shy on unrestricted cash-out and not many will consider leverage greater than 75% LTV, so to obtain a large cash-out with 83.3% LTV is quite a feat.”
The property is a full-service lodging facility known as the Embassy Suites Chattanooga Hamilton Place. The property, which opened in 2013, features 203 rooms, a leased Ruth Chris restaurant and a breakfast dining area, 10,746 square feet of meeting space, a leased retail space (currently under construction), an indoor pool, a fitness center, a business center, a market pantry, a guest laundry room, a rooftop patio, an outdoor patio and fire pit area, and vending areas.