ValueXpress has arranged a $5-million CMBS conduit loan for the refinance of the Hampton Inn – Portland, Texas. The three-story hotel was constructed in 2001. The property is located in Portland, a rapidly growing suburb 12 miles from Corpus Christi, Texas on Highway 181.
The property provides numerous amenities, including complimentary hot breakfast, outdoor pool, fitness room, flat-screen TVs, free high-speed wireless internet and micro-fridge/microwaves in every guest room. The hotel received the 2015 TripAdvisor Certificate of Excellence Award. This honor is awarded to establishments that achieve outstanding traveler reviews on TripAdvisor, the world’s largest travel site.
The property is in proximity to the largest demand driver in the region – oil refining. The property is located near the booming oil refineries operating in Corpus Christi. Despite a concern regarding the drop in oil prices, Corpus Christi refineries are running at 92% of capacity, while the Texas Gulf Coast is operating at 94.4%. These levels are near the peaks experienced in 2006, before the financial crisis, and they suggest that expansions and other projects to at least marginally increase production will be pursued. In addition, dollars will be spent to ensure refineries stay on line as it has also been reported that refining profitability is up. These elements have combined to keep hotel demand in Corpus Christi growing despite the decline in oil prices.
The transaction provided a significant return of equity to the sponsor, in addition to providing funds for Property Improvement Plan (PIP) requirements should the property remain a Hampton Inn at franchise expiration in 2019. Alternatively, the loan proceeds provides flexibility to convert to another franchise brand at the election of the sponsor.