July 22, 2014
Aries Capital has completed a $4.8 million loan for a new MainStay Suites hotel in Midland, Texas. The five-year, fixed rate loan on behalf of the Borrower features a 5.25% interest rate and 80% loan-to-value ratio.
“We originally had difficulty securing favorable loan terms for the new MainStay due to an unexpected rise in construction costs,” said the Aries originator. “Fortunately, our long and successful history working with banks gave the lender a sense of security. The bank worked closely with us to source an alternative to the traditional construction bond, which ultimately enabled us to increase the loan-to-value ratio from 75% to 80%. Our relationship with the bank, combined with the bank’s responsiveness, enabled us to move forward in the construction process without any major delays.”
The 81-room hotel will be constructed conveniently near the I-20 and Lemesa Road interchange with interstate visibility. MainStay Suites is a brand of Choice Hotels International, which operates more than 6,300 hotels in over 35 countries. The new property is planned for construction this year with a completion date of December 2014.
The hotel will service the Midland area, where hotels recorded a record-breaking start to 2014 with 13% year-over-year revenue growth in the first quarter. The city’s current 39 hotels generated more than $27.6 million between January and March, the highest amount from any quarter in history, according to the most recent report from the state’s Office of the Governor, Economic Development and Tourism. The same report notated that demand, or number of nights sold, grew by 9.4% year-over-year in the first quarter as well.
“Midland has reaped the benefits of the West Texas oil boom and is growing rapidly,” added Smith. “We are happy to have provided financing during this exciting time in Midland, which will enable the Borrower to contribute to the continued growth of our local economy.”