$6,000,000 | Salisbury, MD
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.
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.
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.
CHC placed the loan with a CMBS lender for a 10yr fixed rate term with a 25yr amortization schedule at 65% LTV.