ValueXpress has arranged a $5.2-million CMBS conduit loan for the refinance of a three-story Holiday Inn Express hotel constructed in 1999 and renovated in 2013 after the completion of a major change-of-ownership PIP required by the IHG franchise at a cost in excess of $1 million. The hotel is located in Kingwood, Texas, a suburb of Houston. The sponsor purchased the property in January 2013.
The hotel, located near George Bush Intercontinental Airport, provides a free shuttle to the airport and other locations within a five-mile radius of the hotel. Kingwood Medical Center, Administaff, Chevron-Phillips Chemical and Westronics are all easily accessible from the hotel, which is location off Highway 59. The property features a host of complimentary amenities, such as guest laundry services, a fitness center with TV and high-speed wireless Internet access.
“The loan was a follow-up deal for an existing client for whom we financed the Candlewood Suites located right behind the Holiday Inn Express,” explained Jay Bhakta, a Senior Loan Originator at the ValueXpress Jackson, Mississippi office and 15-year ValueXpress veteran. “The transaction was challenging as the property is expected to stabilize at much higher operating levels, post renovation, and the sponsor did not want to lock in lower-than-optimal loan leverage. So the CMBS conduit lender structured an earnout to allow additional loan proceeds to the sponsor over the next 12 months based on operating performance.”
The loan provides for a 10-year term with a 25-year amortization schedule and is non-recourse. Financing was provided by an active CMBS conduit lender that has an ongoing relationship with ValueXpress to arrange additional CMBS conduit loans.