Largo Hotel Portfolio

Location: Largo, Florida

Size: $15,350,000

Challenge: Quick Close

Type: Permanent Loan

Moody’s began imposing their “2013” underwriting requirements in early 2015, and then Fitch followed suit.  As a result, it became difficult to use CMBS for hotels that had large hockey stick increases in NOI, such as these two properties.  Our client was under contract to purchase and wanted the certainty of a bridge loan and at least 75% leverage. At the last minute, their investors decided they preferred a fixed rate loan even at slightly lower leverage.  With a seller anxious to back out of the deal and keep a hard deposit, we switched gears and closed a 72% CMBS loan in just under a month.  We also pushed some of the Formula Blue PIP out to 2020 to keep the equity investment comparable to the aborted bridge loan.

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