Limited Operating Data Doesn't Deter Buyer

HOUSTON—The newly constructed Staybridge Suites Houston–Medical Center is a 120-key extended stay hotel located at 9000 South Main St. The flagged hospitality asset opened in January of this year and is situated in the Texas Medical Center submarket, one of Houston's strongest submarkets. Its location near the NRG Park convention center, NRG Stadium, Rice University and the Texas Medical Center–with the world's largest cancer and children's hospitals–assures the area of a consistent flow of commercial, sports, academic and medical visitors.

To service those types of visitors, hotels, especially those of an extended stay variety, are needed and of keen interest to investors. Mission Capital Advisors' debt and equity finance group recently arranged $15.26 million of acquisition financing on behalf of Midas Hospitality for the purchase of the Staybridge Suites. The Mission Capital team of Philip Justiss, Alex Draganiuk and Lexington Henn structured the recourse loan from IberiaBank.

“Many lenders have been wary of lending on commercial real estate in Houston, given the overall weakness of the oil industry over the past few years. In addition, lenders generally analyze a property's historical operating statements to fully assess its prior health and growth potential, and this is especially true for hotel properties,” Draganiuk tells GlobeSt.com. “As a newly constructed hotel, this Staybridge Suites had very little operating history; however, we were able to successfully convey the very strong micro-location in the Texas Medical Center submarket, and the sponsor's extensive expertise in order to arrange a very strong loan with IberiaBank, which has a very deep understanding of all of Houston's submarkets.”

The Staybridge Suites-franchised property caters to long-term travelers and internationally, nearly 60% of Staybridge Suites guests stay for visits of five or more nights. The hotel features a range of conveniences including a fitness center, barbecue grills and an outdoor pool. In-room amenities include 42-inch cable televisions, as well as fully equipped kitchens with cooktop stoves, full-sized refrigerators and dishwashers.

“The quality of this hotel is unquestionable, and we have complete confidence that its best-in-class amenities and prime location will attract a steady stream of visitors,” said Midas' co-founder, JT Norville. “We were also able to negotiate and structure a mutually beneficial long-term agreement with the IHG brand, one of our three preferred brands across our portfolio.”

St. Louis-based Midas Hospitality is a hospitality-focused commercial real estate investment and management firm with a portfolio currently comprising 30 hotels and more than 2,500 keys with properties in the Midwest and Southeast.

“Despite challenges, we were able to secure interest from a wide range of lenders and provide the sponsor with both recourse and non-recourse options from banks, hedge funds and debt funds,” said Justiss. “IberiaBank was the right choice for a number of reasons, but the determining factors were that they understood the sponsor's financial needs, their business plan and the asset, which is in their back yard.”