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 located 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 earn-out 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.