AUSTIN, TX-A Houston partnership has obtained a $5.35-million loan to knock out five-year, fixed-rate construction debt on the 102-room Hampton Inn & Suites Austin Airport. The new financing has shaved roughly three points from the interest rate.
"The old loan on the Hampton was an unusual construction loan in that it was a fixed-rate, five-year loan that had matured," B. Jeffrey Knowles, managing director for Holliday Fenoglio Fowler LP in Houston, tells GlobeSt.com. "It was a fixed-rate loan at an 8.5% rate. I think they much prefer the loan we got for them." The new financing for the 7712 E. Riverside Dr. property is a 10-year, fixed-rate securitized loan at less than 6.5% interest and 30-year amortization.
Knowles says that structuring the debt package, with a standard loan-to-value ratio, was terribly difficult although questions did arise due to a hotel project that's under way in the immediate neighborhood. However, the Stamford, CT-based GE Real Estate's previous relationship with borrower Valencia Hotel Partners II LP helped push the deal through, according to the loan arranger. The lender also underwrote financing for the partnership's 209-room Hampton Inn & Suites Downtown in Austin and the 213-room Hotel Valencia on the Riverwalk in San Antonio.
"They felt good about the owner, felt good about the property's performance as it's at the top of the submarket," Knowles says. "They believe the additional property under construction will improve the overall submarket and will increase the draw."
Situated on 2.7 acres, the five-year-old Hampton Inn & Suites Austin Airport averaged 83% occupancy during the first quarter. Its average daily rate is $90. Comparable rates for the submarket are 80% occupancy and $79 ADR.
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