SUNSET VALLEY, TX-Triple Gem Properties LP of Austin has obtained $6.6 million of permanent capital to retire construction debt for a 99-room Holiday Inn Express, built three years ago.
Ceniza Capital, also from Austin, arranged the financing for the class A hotel at 4892 Highway 290 W. Ceniza's Patrick Noble says the hotel is considered one of the highest performing in its submarket, with an average 75% occupancy and ADR of $74. The strong performance is one reason why they were able to achieve full leverage, according to Noble, who helped to arrange the financing.
The Ceniza team arranged a 10-year loan through New York City-based Morgan Stanley & Co.'s CMBS program. The financing carries a 30-year amortization at a full LTV and fixed-rate interest in the low 6% range.
"The borrower was stellar from an underwriting perspective, but given the property was newly constructed there was not a long history of operations that lenders typically like to see," Noble explains to GlobeSt.com. "But, the historicals were on a steady basis upward trend."
The hotel is situated in the metro's southwest submarket, just south of Barton Mall and close to residential areas, making it a desired location for overnight guests who might be visiting. Besides its US Highway 290 positioning, it's also close to MoPac Expressway, one of the region's major routes.
Noble says the transaction is Ceniza's first on behalf of Triple Gem, but it most likely won't be the last. "We're talking about some new business with them," he adds. "They're constantly looking for properties to buy and properties to rehab."
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