PHOENIX—Tower Capital, a structured finance firm, has arranged a $5.6-million acquisition loan on behalf of a California-based hotel group to acquire a 129-room Comfort Inn located in Chandler, AZ.
The property is located off of the I-10 Freeway and Loop 202 interchange and is positioned in an area of high growth for the valley, according to the company. The four-story, limited-service hotel was originally built in 1997 and renovated in 2012. The buyer purchased the asset for $7.7 million, or $59,690/key.
The loan was secured through a credit union and represents approximately 73% of the purchase price. It offers the borrower a 4.5% interest rate, fixed for five years, and is based on a 25-year amortization schedule and 10-year total term. This transaction is the second Comfort Inn that Tower Capital has financed within the past 30 days.
“It was important for the borrower to have as much prepayment flexibility as possible so we utilized a credit union for the financing. Unlike CMBS loans which are typically accompanied by a hefty defeasance if paid off early, and banks which are more flexible but will still usually have a step down prepayment structure, credit unions offer the most flexibility with zero prepayment penalty, as long as the borrower and asset meet the credit unions parameters,” said Adam Finkel, principal, Tower Capital.
Tower Capital is a structured finance firm specializing in debt and equity placement on behalf of commercial real estate investors throughout the country. They offer borrowers short term bridge solutions through their in-house private lending platform, as well as conventional financing through their commercial mortgage brokerage division.