ValueXpress has arranged a $1.5-million SBA 7(a) loan for the refinance of a 50-room exterior-corridor Days Inn hotel located in Carlsbad, New Mexico. The 2-story property was constructed in 1995 and renovated in 2016. The $1.5-million renovation in 2016 included all new rooms and furnishings and well as exterior and common area improvements.
The property derives significant demand from oil and gas exploration. Carlsbad is the closest city with lodging options to the oil and gas rich Delaware/Wolfcamp Shale formation within the Delaware basin located in southeast New Mexico. Lodging options for workers have not kept pace with the growth in oil and gas gathering in the Wolfcamp Shale formation, resulting in occupancy rates (80%-90%) well above national averages. Supplemental housing, including “mancamps” and RV parks, have not provided enough supplemental housing to accommodate all housing needs.
“This loan was originally to be part of a CMBS portfolio loan consisting of four hotels located in Carlsbad,” commented Michael Sneden, Executive Vice President at ValueXpress. “We closed a 2-property hotel portfolio for our sponsor consisting of a Hampton Inn and Holiday Inn Express located in Alamogordo, New Mexico in March, but the pandemic temporarily derailed the closing of the Carlsbad portfolio.”
“The Days Inn transaction included a partner buy-out that needed to be completed, so we quickly pivoted to an SBA 7(a) loan through one of our long-standing SBA 7(a) banking relationships,” said Sneden. “The sponsor was extremely grateful that ValueXpress was able to find an alternative solution for the partner buy-out.”
For your next SBA 7(a) hotel financing, please contact Mike Sneden (email@example.com; 212-883-6447).