Aries Capital announced that Rushi Shah, senior vice president, from the firm’s Chicago office has closed on a $10.5 million loan for the new 108-room Courtyard by Marriott in Victoria, Texas on behalf of Pride Management. Located at 8002 N. Navarro in Victoria, 25-miles from the Gulf Coast, the new Courtyard is a development of Pride Management, which also owns and manages the hotel.
At the onset of the development project, Pride Management secured a construction loan through a bank, which was due to transition into an SBA featuring a 20-year term and 20-year amortization. The SBA would have also been a full-recourse loan with stiff prepayment penalties. In order to avoid the SBA loan, the Borrower came to Aries Capital to secure an alternative source of financing as the hotel was nearing its opening.
“Fortunately, the Borrower brought us in at the right time,” said Shah. “We were able to source better financing that didn’t require personal guarantees from the Borrower, close-out the original bridge loan, and eliminate the need to move into the pending SBA loan.”
Aries Capital secured the new $10.5 million loan with a CMBS lender with whom the firm has completed several transactions. The new two-year, non-recourse, interest only loan also enabled the Borrower to take cash out for marketing the newly opened hotel.
“While the deal posed certain challenges, particularly as the property was new with limited available operating history, we were able to secure the loan based on our relationship with the lender; the promising location; as well as the Borrower’s track record of having successfully developed 30 hotels throughout the Gulf Region,” added Shah.
Pride Management expects early success at the property which will draw from numerous nearby corporate campuses as well as traffic from the coastal region. As such, in 18 to 24 months, Aries Capital will leverage its Wall Street relationships to place permanent CMBS debt on the property for the borrower.
“After having a bad experience with CMBS in the past, I was cautious about pursuing alternative financing again,” said Pride Management’s Executive Vice President, Nilesh Patel, CHO, whom met Shah at an AAHOA event earlier this year. “My fears, however, were quickly allayed as Aries Capital delivered everything they promised throughout the entire process. Aries Capital is one of the best mortgage banking firms I have worked with and I plan to do several more deals with them in the future.”