ValueXpress obtained an $8,200,000 CMBS conduit loan for the purchase of a 102-room Hilton Garden Inn located in Killen, Texas. The purchaser, Vui Le, will complete a change-of-ownership Property Improvement Plan (PIP) in conjunction with a new 15-year franchise agreement with Hilton Worldwide. The seller, Sam Patel, has been engaged to manage the property for Vui Li.
The hotel is located in Killeen, Texas, home of Fort Hood, the most populated U.S. Army installation in the world. With over 45,000 soldiers and 9,000 civilian employees, significant hotel demand arises from Fort Hood.
“The relationship with ValueXpress and the seller, Sam Patel, dates back to 2000 when we provided a CMBS conduit loan for Sam’s Hampton Inn in Killeen,” commented Michael Sneden, Executive Vice President at ValueXpress. “We refinanced the Hampton Inn in 2011, so when it came time to sell his Hilton Garden Inn, he contacted ValueXpress on behalf of the seller, knowing we would get the deal done.”
“The transaction was part of a tax-deferred 1031 exchange,” said Jay Bhakta, who originated the loan for ValueXpress. “So we were under a time constraint to get the deal closed before the expiration of the exchange period, which was complicated by a mold issue that arose during the loan underwriting.”
The Property Condition Assessment noted evidence of mold on the exterior walls of the property and on adjacent interior walls. A mold investigation was performed that resulted in a very large estimate for remediation costs. ValueXpress hired mold experts to develop a more cost-effective solution. In addition, ValueXpress, at no charge, will work with Sam and Vui post-closing to get the remediation completed and funds released from escrow to pay for the work.