ValueXpress closed a $2.85-million first-mortgage loan with a Texas banking partner, Herring Bank, for a 3-story, 62-room interior-corridor limited-service hotel built in 1999 on a 1.5-acre site in Killeen, Bell County, TX. The property is franchised as a Hampton Inn. Located in the southwest section of Killeen, the property is approximately two miles southeast of Fort Hood. Demand for the hotel arises primarily from commercial/business travelers visiting the city of Killeen. According to the guarantors, the source of business demand is diverse and includes Sallie Mae, AT&T and local banking institutions. ValueXpress processed an SBA 7(a) loan guarantee on behalf of Herring Bank, as the bank was not familiar with SBA 7(a) processing requirements.
“The transaction represents the second time ValueXpress has financed this property,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “We originally provided a 10-year, fixed-rate, non-recourse loan for the owner ten years ago. The loan recently matured and was extended while the subject loan was processed. As fixed-rate, non-recourse hotel loans require a minimum balance of $5 million, we obtained an SBA 7(a) loan for now, until the CMBS conduit loan minimum comes down, at which time we will likely refinance the loan into a CMBS conduit program.”