Sleep Inn and Mainstay Suites
$7,500,000 | Lancaster, PA
Cronheim Hotel Capital Secures $7,500,000 for Acquisition of a Sleep Inn and Mainstay Suites in Lancaster, PA
David Turley, Janet Proscia and Jeffrey Pacailler secured a $7.5 million loan for the acquisition of a Sleep Inn and Mainstay Suites located just west of Lancaster, PA. The two hotels, located adjacent to one another, were acquired for $10 million from a local owner/operator. CHC financed the purchase at 75% of the acquisition price with 10-year, fixed-rate financing on a 27-year amortization schedule locked at 4.39%.
The two hotels, totaling 151 keys, offer both transient and extended stay product. The properties are located just off Route 30 in Mountville, PA, approximately five miles west of Lancaster between Lancaster and York, PA. Local demand generators include Lancaster tourism and Spooky Nook, one of the largest indoor sports facilities in the County, in addition to local transient and corporate demand.
“We’re pleased to have secured leveraged financing for two budget brand hotels located in a secondary market,” said David Turley. “Central Pennsylvania is a very stable market and these hotels were clearly under-managed, but this was by no means, an easy assignment given the flags, leverage requirement and location. Our efforts helped the borrower lock in a 6.33% loan constant on a 9% cap acquisition at 75% of the purchase price. The resulting cash-on-cash is over 15%.”
Janet Proscia commented: “The two hotels were acquired out of a larger development that included a small retail building and a vacant parcel being retained by the seller. The condominium structure created to effectuate the sale, added an additional layer of complexity.”
Founded in 1897, David Cronheim Mortgage Corporation and its affiliate companies, including Cronheim Hotel Capital, provide debt and equity capital for a wide spectrum of commercial real estate assets. Through their Channel Real Estate Funds affiliate they have provided equity capital for numerous real estate investments in an efficient and cost effective manner. Cronheim Mortgage maintains correspondent and/or servicing relationships with twelve institutional investors, mostly insurance companies, and currently services $2,000,000,000 of debt. The company and its insurance company correspondents have substantial debt and equity capital to invest in quality real estate at pricing below alternative sources, especially for long-term debt.