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Salisbury Hampton Inn

$6,000,000  |  Salisbury, MD

 

Background:

The owner – a NYC-based family office in partnership with a regional management company – needed to refinance a maturing CMBS loan on a Hampton Inn in a tertiary market.

 

Challenges:

  • The remaining term of the franchise agreement was only 7 years and there was risk that Hilton would require a large PIP for an extension beyond the loan term.

  • A highly seasonal market created dramatic monthly cash flow fluctuations.

  • SuperStorm Sandy’s impact on vacation destinations on the MD coast, on which the Salisbury market depended during peak summer months, was uncertain.

Solution:

  • Extensive research into coastal storm damage and rebuilding plans as well as the sustainability of local economic drivers helped lenders get comfortable with the market’s long-term viability.

  • After generating multiple bids for the financing, CHC was able to negotiate borrower-friendly structure around the potential loss of the franchise agreement.

Outcome:

CHC placed the loan with a CMBS lender for a 10yr fixed rate term with a 25yr amortization schedule at 65% LTV.

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