The southeast regional office of Anaheim, CA-based Fremont Investment & Loan is funding the construction work through a floating rate loan starting at 8% with semi-annual adjustments. The loan is amortized over 20 years. Fremont is confident the loan is well placed.
"Daytona is predominantly a 'drive-to' market, which should insulate it from the economic shocks from the current recession and terrorist attack repercussions," Stephen R. McRae, Fremont's vice president and regional manager, says in a prepared statement.
The loan is also secure, McRae feels, because the total costs of the project are well below replacement costs, "substantially reducing the risk that new competitive supply could be brought on line."
Owners Bray and Gillespie, principals in Bray & Gillespie III, are directly involved in day-to-day operations of the hotel, adding another security plus for the loan, McRae says.
Plaza Resort & Spa was built and expanded in three stages, 1925, 1969 and 1972.
Fremont Investment & Loan is a subsidiary of Fremont General Corp. Fremont focuses on bridge financing opportunities for a broad range of income-producing properties. Loan amounts typically range from $2 million to $30 million.
The Boca Raton, FL office of Holliday Fenoglio Fowler brought the Plaza Resort deal to Fremont.
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