Hotel-To-Multifamily Conversion, Sacramento, CA
- Capital Source: Debt Fund
- Purpose of Loan: Acquisition Bridge Construction
- Loan Amount: $23,200,000
- LTC: 85%
- Rate: LIBOR + 450
- Term: 3 Years
- Amortization: Interest Only
- Recourse: Non-Recourse
Tower Capital recently arranged a $23.2 million acquisition and renovation loan for a 132-key, Holiday Inn Express hotel that will be repurposed to a 129-unit, B-Class, multifamily community. The four-story project was originally built in 1979 and is located in Sacramento’s downtown convention center.
Tower’s client, a Phoenix-based private investment firm, specializes in the transforming of underperforming hotels into attainable rental housing. They have completed several hotel-to-multifamily conversions, capitalizing on the need for more workforce housing located in in-fill locations.
The sponsor projects completing construction and converting all the units over a 12-month time-period, while leasing is scheduled to begin as soon as month 10. The unit mix will consist of seventy-four studio units, nine 1-bedroom units and forty-six 2-bedroom units. Renovations will include the addition of kitchens and washer/dryers as well as cosmetic improvements such as paint, fixtures, and countertops.
The non-recourse loan provides the borrower with a 36-month term at 85% loan-to-cost. Out of the $23.2 million in proceeds, $12.9 million was held back for capital improvements. The loan was closed with California-based debt fund with whom Tower Capital has proudly financed over $62 million with as of August 2021.
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 $300 Million and have financed over $2 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.