ValueXpress has arranged a $6.2-million CMBS conduit loan for the refinance of a 114-room Holiday Inn Express and Suites located in Orange City, Florida. The property is a four-story hotel constructed in 2003 and renovated in 2013. The loan provided cash out to the borrower for a future Property Improvement Plan (PIP) to finish conversion of the property to the new franchise-wide mandated Formula Blue prototype. Also, additional cash proceeds were returned to the borrower and were utilized as equity to obtain a construction loan to build a new hotel property.
The property is located just off Interstate 4, halfway between Orlando and Daytona Beach. The hotel provides easy access to many local attractions — the Central Florida Zoo, historic downtown Deland, Orlando International Airport and historic Blue Springs Park. In addition the hotel is just 24 miles from Daytona Beach, home of the Daytona 500 and the Coke Zero 400, as well as the famous Daytona Beach itself.
“The transaction’s main challenge centered around the loan structure required to ensure that funds were available to complete the Formula Blue PIP that is not required to be fully implemented until 2022,” commented Gary Unkel, Senior Loan Originator at ValueXpress, who handled the transaction. “We had a difficult time convincing the lender to create a reserve for the Formula Blue program at a lower-than-customary amount because much of the work had been completed,” explained Charles Lobetti, an originator in ValueXpress’s Nashville office who assisted Gary on the transaction. “But after several calls with the franchisor, we worked out the details and arranged a compromise with the borrower and lender that satisfied both parties.”