ValueXpress has arranged a $5,000,000 SBA 7(a) loan commitment for the refinance of the Hilton Garden Inn – McAllen, a 4-story, 104-room interior-corridor property that was constructed in 2000. The property offers a restaurant and lounge, 975 square feet of meeting space, an outdoor pool, an outdoor whirlpool, a fitness room, a business center, a market pantry and a guest laundry room. The property was purchased by the sponsors from a corporate owner in January 2020 utilizing an above-market rate bridge loan. The subject loan features a loan rate significantly lower than the existing bridge loan.
The Hilton Garden property is located on I-2/Highway 83, less than 10 minutes from McAllen International Airport. The hotel is within three miles of La Plaza Mall, Quinta Mazatlán estate and gardens, and McAllen Convention Center. The property is located next to South Texas Health System – McAllen. As a result, the property has maintained higher occupancy during the COVID-19 pandemic than U.S. averages due to demand from the hospital.
“The sponsor qualified for an SBA guaranty fee waiver and six months of payment relief offered by the CARES Act,” noted Michael D. Sneden, Executive Vice President at ValueXpress. “Total savings for the sponsor from both programs was over $200,000.” The prepayment penalty on the loan is 5%/3%/1%, and the intention is to refinance the loan into a long-term, fixed-rate CMBS conduit loan in 24 months, when the penalty falls to 1%.