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DELAVAN, WI-The owners of Lake Lawn Resort, stretched along two miles of shoreline of Lake Delavan, have arranged $18 million in new financing to pay for and complete a condominium conversion of the 280 units at the hotel. After the conversion is finished, the owners intend to begin a second phase of development that calls for up to 1,000 additional resort hotel/condo units, a convention center and an indoor water park on the 210-acre site, says officials with ORIX Real Estate Capital, who sourced and close the conversion loan. Matthew Lund with Collateral Real Estate Capital LLC arranged the loan.

The property was built and has operated since the late 1800s as a resort, with the main facilities constructed in the 1960s, says Terry Connors, vice president of debt and structured finance with ORIX. “In 2005 there was an extensive renovation, it was practically gutted, with a full redo of the hotel units and common areas,” he tells GlobeSt.com.

In spring 2006, owners Delavan Resorts Holdings LLC began selling out the hotel units as hotel/condominiums, Connors says. Now, 185 of the units have been sold for more than $40 million, with 95 left to sell, he says. The recent financing pays for the conversion of all the units, and for planning and predevelopment work for the future phases, he says. The owners have not revealed how they plan to finance the new construction, which will like start sometime in the third quarter of this year, Connors says. The property will stay an independent resort, he says.

The property already has two restaurants, meeting facilities, an 18-hole golf course, a 162-slip marina and even an airstrip. Connors says the project has many positives. “We don’t do a lot of hotel condos,” he says. “We didn’t have to take the conversion risk. But there are many already done, and we like this property, it has the right location. We view this loan as very sound.”

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