ValueXpress has arranged a $3,250,000 CMBS conduit loan for the refinance of a Baymont Inn and Suites franchised hotel located in Mackinaw City, Michigan. The Baymont Inn and Suites – Mackinaw City is a 3-story, 77-room interior-corridor hotel constructed in 1997.
The hotel is located at the northern most point of Michigan’s Lower Peninsula along the shore of the Straits of Mackinac. Mackinaw City sits at the southern end of the Mackinac Bridge that leads to Michigan’s Upper Peninsula. The Lower and Upper Peninsulas are connected by the 8,614-foot Mackinac Bridge. It is at this location where Lake Huron, to the east, and Lake Michigan, to the west, meet.
The primary demand for the hotel is tourism. Mackinaw City is a vacation destination that accommodates over 1.2 million visitors a year. Tourism is the largest employment and economic sector in the region.
“The CMBS loan paid off a high-cost, recourse SBA 7(a) loan that was floating rate,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “The new loan features a 10-year, fixed-rate term with an interest rate under 5%, providing significant savings to the sponsor.”
The transaction was challenging as the property is closed for six months during the winter. To ensure enough funds will be available to pay the mortgage, escrows and operating expenses during the winter, a seasonality reserve was structured: Payments are applied automatically by the servicer during the winter months and the reserve is re-filled during the summer months.
For your next hotel financing, contact Mike at mikes@valuexpress.com.