$25m in financing makes Tarrytown hotel rehab happen.Eastern Union Commercial recently arranged a $24,100,000 loan, provided by CIBC CIBC Canadian Imperial Bank of Commerce CIBC Centres Interinstitutionnels de Bilan de Compétences CIBC Commonwealth Institute of Biological Control (Trinidad) CIBC Commercial International Brokerage Company , in senior and mezzanine financing Mezzanine Financing A hybrid of debt and equity financing. Mezzanine financing is typically used to finance the expansion of existing companies, and it is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the for the full rehabilitation rehabilitation: see physical therapy. and renovation of the Tarrytown Doubletree located at 455 South Broadway, Tarrytown, NY. This hotel is a full service 246-room hotel and banquet hall Definition A banquet hall is a room used for social gatherings like receptions, reunions, parties, and business events. . Abe Bergman of Eastern Union Commercial's New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of office was able to secure a very low, blended rate over a two-year term. "Although this deal was faced with many obstacles and complexities," said Bergman, "the Eastern Union team was able to successfully deliver a fantastic deal." Project completion is expected early next year. Describing some of these complexities, Bergman said, "The deal initially began as a $12 million rehab of half the hotel. But then, after being entirely underwritten, the other half of the hotel had to be completely shut down after a major storm caused significant flooding. As a result, lenders had to completely reassess reassess Verb to reconsider the value or importance of reassessment n Verb 1. reassess - revise or renew one's assessment reevaluate how they viewed the property; it was now non-operational--with no operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , and had severe flood damage." While numerous lenders looked at the project, CIBC was able to provide the clients the confidence that they understood the deal and would successfully close. Eastern Union's years of doing business with CIBC, and maintaining a strong working relationship, allowed' for the project to overcome the roadblocks that typically arise. Since 9/11, lenders had been adverse to lending on even fully operational hospitality properties. In early 2005 they reluctantly re-entered the hotel lending market. A large part of current hotel lending is for stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. projects that show strong 12 month trailing financials with powerful sponsorship. This project was valued purely on projections, and though financially strong, was the first hotel project for the sponsors. Eastern Union Commercial's Senior Analyst, Shaya Sonnenschein, explains that despite the challenges, the hiring of a major hotel operator to manage the facility created the willingness for the lender to move forward. He credits the skill of the brokers as well as the strong relationships Eastern Union Commercial has forged with various lenders. "Eastern Union is familiar with these types of deals and we have many banking relationships that further strengthen our position," said Sonnenschein. "While the deal had its twists and turns, our staff was confident from the start that our lenders would deliver precisely the deal we structured at the terms we promised our client." |
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