When American Property Management Corp. acquired the hotel at2910 Yale Blvd. SE in early 2007, the owners immediately wanted tooperate it as a Sheraton. "They didn't get the renovation plancompleted in time so they decided to drop the Wyndham franchise.While they've been developing the renovation plan, the hotel hasbeen operating as an independent," says Michael D. Armstrong,president of San Diego-based Neptune Hospitality Advisors.

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Armstrong says the owner is upgrading interiors to take thehotel up to the Sheraton's design standards. "They're not movingwalls," he adds. "The property's in good shape." Upgrades have justbegun and should be completed by first quarter 2009.

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Even with a renovation plan and a pending new brand, Armstrongacknowledges to GlobeSt.com that finding financing was tough,especially given current economic times. He says what helped,however, was the owner's strong reputation and the fact the hotelis in a well-traveled location near the airport. In addition, hesays the hotel's cash flow has been outstanding, even while beingoperated as an independent. The hotel's occupancy is just shy of80%, with the average daily room rate falling between $75 and$80.

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Armstrong arranged a five-year loan through a national lender,getting a variable interest rate of 400 to 500 basis points overLibor. The 70% loan-to-cost financing has 12 months ofinterest-only payments.

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