PHILADELPHIA, PA—Versant Commercial Brokerage has successfully recapitalized the Hampton Inn – Philadelphia Airport located in Philadelphia, PA. Versant assisted the tenant-in-common investors by originating the new financing, purchasing the TIC interests of those who needed to exit the investment, and utilizing Internal Revenue Code Section 721 to roll up the TIC structure into an LLC on a tax-deferred basis.

Versant says it completed the complex transaction in 180 days. The new debt of $17.8 million has a fixed rate of interest of 4.79 percent for ten years. Monthly distributions to the investors will increase by approximately 50 percent. As part of the restructuring, the hotel will be undergoing a $3.25 million property improvement plan.

"We are extremely pleased with this result," says Matt Mueller, president of Versant. "We cashed out the TIC owners who needed to sell, and helped the other owners stay in the property on a tax deferred basis with a hefty increase to their distributions."

Versant also eliminated the Master Lease structure in order to lower costs and give the investors more control over their asset.

The tenant-in-common investors also opted to replace their former asset manager, sponsor, and hotel manager. The TIC investors selected Clear Vista Management as their new asset manager, Virtua Partners as the new sponsor, and Synergy Hospitality as the new hotel manager.

"This was a complex and difficult process, but we are very happy with the result," says Scott Baron, head of the Steering Committee. "It was incredibly important to give our TIC investors the option to stay in the investment or cash out. This enabled the group to maintain unity and deal with issues in a rational manner. We are relieved that our investment has been restructured and look forward to the increased distributions."

Instant Insights /

Versant Recapitalizes Philadelphia Airport Hampton Inn

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