ValueXpress Obtains $6,650,000 CMBS Conduit Loan for a 92-Room Hilton Garden Inn Located in Chesapeake, VA

ValueXpress obtained a $6.65-million first-mortgage loan that was utilized to refinance an existing maturing CMBS conduit loan secured by a 92-room Hilton Garden Inn located in Chesapeake, Virginia. The four-story hotel was constructed to the Hilton Garden prototype in 2003.

The hotel is located in the Greenbrier Business Park, ten miles from Norfolk International Airport. The Greenbrier Mall is nearby as well as several restaurants within walking distance. The hotel is proximate to businesses such as Lockheed Martin, Volvo Penta and Oracle.

Hilton Garden Inn – Chesapeake, VA

Hilton Garden Inn – Chesapeake, VA

“The transaction had its challenges,” noted Michael D. Sneden, Executive Vice President of ValueXpress. “The property recorded net cash flow below 1.0x on the proposed loan amount during 2009 and 2010, so investors in the CMBS deal had to be educated on the sponsor, market and property in order for the loan to be approved.” Furthermore, in 2014, due to unusually cold weather, a fire sprinkler system pipe burst in the hotel attic, flooding the floors below over most of the hotel. The flood caused $1.4 million of damage and resulted in limited hotel operating data for the first half of 2014.

The loan was set to mature on March 1st, so it was critical that the loan be approved and funded prior to February 5th in order for the sponsor to avoid extra fees of about $35,000 in additional interest for February. The loan was approved and funded in time to avoid these additional charges.

This entry was posted in CMBS, CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit and tagged , , . Bookmark the permalink.

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