ValueXpress has arranged a $9.1-million CMBS conduit loan for the refinance of a 104-room interior corridor limited-service hotel constructed in 2013 located in the North Scottsdale market of Phoenix, Arizona. The property is part of the “Desert Ridge” master-planned commercial area that encompasses 5,700 acres of land to be developed into commercial, retail and housing. The area is experiencing substantial growth and construction is expected to last for many years.
The area is anchored by the Mayo Clinic, the first and largest integrated nonprofit medical group practice in the world. The Clinic employs more than 3,800 physicians and scientists and 50,900 allied health staff. The hotel is also proximate to numerous other demand generators, the JW Marriott Resort and Spa, Desert Ridge Marketplace with over 110 retailers and restaurants, Scottsdale Sports Complex and Scottsdale Municipal Airport.
“The loan was a challenge as the property is encumbered by both a land lease that has a remaining term of 78 years and two commercial condominium regimes created for the maintenance of the common areas within the master planned community,” explained Jay Bhakta, a Senior Loan Originator at the ValueXpress Jackson, Mississippi office and 15-year ValueXpress veteran. “This required close interaction with the State of Arizona as owner of the land and the condominium associations to obtain required CMBS documentation to close the loan.”
“In addition, the loan provided significant return of equity to the borrowers during a period in the CMBS market where investors have become concerned about large cash-out refinancings,” noted Michael D. Sneden, Executive Vice President at ValueXpress. “However, we were able to sell the merits of the transaction and preserve the full amount of the equity return to the borrowers at closing.”