June 24, 2013
Aries Capital has closed on the financing for a new 77-unit, Holiday Inn Express to be constructed in Cuero, Texas. The hotel is located within the Eagle Ford Shale area of Southern Texas.
“We chose to work with Aries Capital because of their knowledge of the hotel industry as well as their ability to secure financing for challenging circumstances,” said Anil Verma of Avalon, LLC and the borrower in the loan transaction. “In this particular instance Leonard not only had to find a lender willing to provide a loan for new construction, but once the lenders were sourced, he then also had to coordinate between SBA loan provider as well as the Community Development Council (CDC) to ensure the requirements and deadlines were met.”
In this transaction, the borrower received a $4,700,000 construction loan with an 18-month, fixed rate term at 6% interest. The permanent loan features a five-year arm at an interest rate of Wall Street prime plus 2-1/2 percent with a floor of 6%. The transaction was funded through an SBA 504 loan and the CDC.
“After sourcing 15-20 different lenders, we secured financing through an SBA lender in Louisiana,” said a rep of Aries Capital. “The difficulty of this loan was due to the need to coordinate multiple involved parties and many moving parts. We were up to the challenge and able to secure the right lenders, handle their unique demands and timelines, work through franchise agreement issues, and ultimately deliver the financing the borrower needed.”
Holiday Inn Express is a brand of InterContinental Hotel Group which operates 4,400 hotels in over 100 countries. The 77-unit hotel will service the growing Eagle Ford Shale area, a hydrocarbon producing formation of significant importance due to its capability of producing both gas and oil. With oil reserves estimated at 3 billion barrels and with potential output of 420,000 barrels a day, the Eagle Ford Shale area is a significant economic driver in Texas.