$25m in financing makes Tarrytown hotel rehab happen.
This hotel is a full service 246-room hotel and banquet hall.
Abe Bergman of Eastern Union Commercial's New York 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 how they viewed the property; it was now non-operational--with no operating income, 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 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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|Publication:||Real Estate Weekly|
|Date:||Jul 26, 2006|
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