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Hospitality
Loans
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Mini-Permanent
& Permanent Financing
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| Property
Types: Hotel and motel
properties including both franchised
by regional and national flags and
independently managed facilities.
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| Preferred
Loan Size: $2 to $100
million. (Larger loans are available.)
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| Loan
Limits: The loan to value
ratio may not exceed 75%. The
minimum debt service coverage ratio
must be at least 135%.
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| Occupancy:
For underwriting purposes the maximum
occupancy will be the lesser of the
trailing twelve months actual income
or 75%. Properties with less
than 60% occupancy are generally
ineligible.
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| Underwriting
Assumptions: Operating cash
flow (with primary reliance on
Trailing 12 months results) will
generally be adjusted for underwriting
purposes to provide: for
management fees of the greater of 5%
of revenues or actual fees; for
franchise fees of the greater of 5% of
revenues or actual fees; and for
capital replacement reserves of at
least 5% of revenues.
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| Borrowing
Entity: Generally, a single
purpose entity is required.
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| Loan
Term: 5, 7 and 10 years with
amortization based on 15-25
years. Amortization may be
extended for additional basis points.
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| Rates:
Interest rates are fixed at a
determined spread over comparable term
treasuries, and vary based on coverage
ratios. A variable interest rate
floating at a spread over the 1 month
LIBOR is available. Please call
for current rates and spread quotes.
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| Guarantees:
The loans are generally non-recourse
except for standard carve-outs.
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| Assumable:
Yes, with consent and a 1% fee.
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| Reserves:
Tax and insurance reserves are
required. Also, a capital
reserve escrow will be established and
funded monthly based on a rate of not
less than 1/12 of 5% gross annual
revenues.
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