application on a 10-year
non-recourse loan to refinance
existing debt and fund seasonality
PENSACOLA—The hotel market is the Southeast is still seeing plenty of action—and winning the confidence of investors. Aries Capital just arranged a $57 million CMBS loan for three Gulf Coast hotels for Innisfree Hotels.
Aries Capital senior vice president Jeff Bucaro arranged the financing. The loan closed 32 days from application on a 10-year non-recourse loan to refinance existing debt and fund seasonality reserves. The loan also provided substantial cash back to the Innisfree.
“We were very skeptical about Aries’ ability to close a loan of this size and complexity with multiple brands and properties located in two different states in the time required,” Julian MacQueen, CEO and founder of Innisfree Hotels, tells GlobeSt.com. “Aries delivered and fulfilled their term sheet outline without exception and in record time.”
In a positive sign for the capital markets, Innisfree Hotels had three financing options to choose from. Despite a known risk of not being able to close the deal by the end of the month, however, Innisfree decided to work with Aries because of its reputation in the hospitality field, the volume of hotel loans the firm has closed and the strength of its capital partners.
“When we met with the borrower in February, their loans were maturing in March and they were very far along on two potential financing options including staying with their existing lender,” Bucaro tells GlobeSt.com. “We were able to bring a very compelling offer to the table in just two days, and made the borrower comfortable in our ability to execute on it.”
A Hilton Garden Inn and Holiday Inn Express in Orange Beach, Alabama and a Hampton Inn in Pensacola Beach, Fla., all of which are Gulf Front properties, make up the portfolio. Aries reports that securing financing for hotels in the Gulf Coast has been a challenging due to the 2010 oil spill, even though most of the beaches remained pristine with no impact.
“We were impressed with Innisfree Hotels leadership and properties, including their skillful management through a down market that was caused by factors outside of their control,” Neil Freeman, chairman and CEO of Aries Capital, tells GlobeSt.com. “We aggressively pursued the deal because we felt confident that we could overcome its complexity and secure an attractive financing solution in the timeframe required.”