Hospitality Industry Financing

-Purpose: Financing for hotel acquisitions, renovations, and ground-up developments.  

 – Benefits:  

  – Loan amounts: $5 million – $30 million per borrower  

  – Funds held in escrow at closing to ensure borrower funding availability  

  – Draws monitored and controlled as part of the overall funding process  

 –Eligibility Criteria & Loan Structure:

 -Joint & Several Recourse: Full legal and due diligence background required on each   principal  

   -LTC/LTV: Not to exceed 75% of total cost or 70% of stabilized value, subject to covenants  

   -Term: Up to 36 months, with extension options based on lender approval, compliance, and fee payment  

 -Lockout/Exit: Minimum 50% of term lockout/yield maintenance, then 1.0% exit fee  Collateral:  

  – 1st Mortgage/DOT with assignment of rents  

  – UCC-1on assets held by Real Estate Holding and Operating Companies  

 -LLC Pledge**: Pledge of LLC certificates of RE HoldCo and OpCo, determined in underwriting  

 -Escrow: Taxes and insurance required  

 -CapEx Reserve: Typically structured 12–24 months after C of O for renovations  

Typical Covenants: 

  – DSCR: 1.25x  

  – Guarantor TNW: 3x loan request  

  – Post-Closing Liquidity: 10% of loan amount    – Debt Yield**: 9.00% – 12.50%, varies by asset class