ValueXpress closed a $4.5-million first-mortgage loan commitment with its New York banking partner, Country Bank, for the purchase of the fee interest in a 72-room interior-corridor limited service hotel originally constructed in 2006 and expanded in 2008-2009 (re-opened January 2010) operating under a Quality Inn franchise. The Quality Inn Jamaica AirTran hotel is conveniently located 10 minutes from John F. Kennedy International Airport and LaGuardia Airport with easy access to Manhattan. Simultaneously with the closing on the purchase, the current land lease between Borrower, Purchaser and Lessee Hariohm Realty LLC and Seller and Landlord Luis Morica was be extinguished, allowing the loan security for the transaction to be a first-mortgage position on the fee interest.
“The transaction took a bad turn early on as the original lender on the transaction approved the loan for less proceeds than what was applied for,” commented Jim Brett, the ValueXpress underwriter on the transaction. “The original lender was uncomfortable with the amount of cash-out proceeds to the borrower despite LTV under 60% and significant equity that remained in the property after the cash out. We were able to bring Country Bank in at the last minute to provide full proceeds to the borrower.”