Hilton Tucson East – Tucson, AZ
- Loan Amount: $12,730,000
- Capital Source: Debt Fund
- Purpose of Loan: Acquisition Bridge
- LTC: 67%
- Term: 24 Months + 12 Month Extension Option
- Prepay: 18 Months Yield Maintenance
- Interest Only Payments
The Hilton Tucson East is a 232 key full-service hotel located in Tucson, Arizona. The property was originally built in 1981 and underwent a small renovation in 2009. Tower’s client, a Scottsdale-based, full service, real estate investment company, acquired the asset for $9,450,000 with an extensive $8,000,000 renovation planned. The property has long suffered from absentee ownership and unmotivated management, and consequently, has trailed the competitive set in areas such as ADR and RevPar. The buyer has a strong track record of turning around underperforming assets and saw an opportunity to maximize the performance of the property through a major facelift and putting in place a more motivated and experienced management and sales team.
The 67% loan-to-cost financing secured by Tower Capital was inclusive of both renovation costs and a $400,000 lender-funded interest reserve. Tower negotiated a substantially discounted interest rate on any unfunded capital improvement dollars during the first 18 months of the loan, which could also accrue and be paid at the end of the loan term in order to boost cash flow for the borrower during the renovation and stabilization period.
About Tower Capital:
Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind.
Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. We specialize in debt and equity placement ranging from $2 Million to $100 Million and have financed over $500 Million for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.