Mag Mile Capital Successfully Arranges Financing for Hotel Acquisition
Mag Mile Capital, a dedicated firm based in Chicago, is thrilled to announce a recent achievement: the arrangement of $15.9 million in financing aimed at the acquisition of a prominent hotel property. This acquisition revolves around the Hampton Inn located in El Paso, Texas, and was facilitated on behalf of Nexgen Management, a well-regarded hotel management and ownership enterprise.
Details of the Financing Structure
The financing package has been ingeniously structured to include a substantial senior CMBS loan totaling $13.9 million alongside a mezzanine loan of $2 million. This combination represents over 80% leverage against the purchase price, ensuring a solid financial footing for the deal. The senior debt is designed with a fixed-rate structure, promoting long-term stability and optimizing the proceeds for the sponsor involved.
Innovative Solutions in a Competitive Market
Leading the transaction was Michael Taylor and Prabhat Jayara, both Vice Presidents of Originations at Mag Mile Capital. Their collective expertise was crucial in navigating the complexities of securing a mezzanine piece that complements a CMBS loan, particularly within today’s challenging market landscape.
“We faced the task of finding a competitive mezzanine option that was willing to invest behind a CMBS loan, which is no small feat in the current climate,” remarked Michael Taylor. “However, we successfully tailored our offer to meet the specific needs of our client, demonstrating a unique strength in securing high-leverage terms for this vital acquisition.”
Prabhat Jayara further emphasized the opportunity presented by the Texas border market, stating, “Nexgen Management's vast experience in operating hotels in locations such as these made them an ideal candidate for this transaction. We are pleased to have crafted a deal that not only optimized leverage but also maintained favorable conditions for a client we greatly value.”
Commitment to Innovative Financing
Rushi Shah, the CEO of Mag Mile Capital, expressed pride in the firm's capacity to structure and source capital innovatively, underscoring their commitment to helping clients thrive even when market conditions may appear restrictive. “This deal showcases our ability to creatively pair CMBS with mezzanine financing, offering Nexgen Management a high-leverage solution that positions them for ongoing success in their expansion efforts,” Shah noted. This transaction also marks a significant milestone, as it represents the fourth closing with this client, cumulatively exceeding $75 million in secured deals.
Transaction Summary and Highlights
The acquisition of the Hampton Inn El Paso is a noteworthy event in the commercial real estate landscape. The transaction details are as follows:
Deal: Hampton Inn El Paso Acquisition
Location: 6635 Gateway Blvd W, El Paso, Texas 79925
Asset Type: Hotel
Financing Type: Senior CMBS Loan and Mezzanine Loan
Total Financing: $15,900,000
Senior Loan: $13,900,000
Mezzanine Loan: $2,000,000
Total Leverage: Over 80% Loan-to-Purchase Price
Term: 5 Years
Rate Type: Fixed Rate
Sponsor: Nexgen Management (Dallas, TX)
Originators: Michael Taylor, Prabhat Jayara
Unique Aspects: Availability of small mezzanine loans; Specialized market expertise
About Mag Mile Capital
Mag Mile Capital operates as a boutique, full-service mortgage banking firm focused on commercial real estate. With its headquarters in Chicago and a presence across the country, the firm has developed a robust reputation since its establishment in 1991 for providing sophisticated financing solutions that span a variety of structures including bridge loans, mezzanine financing, permanent loans, and equity partnerships. By leveraging extensive relationships within capital markets, Mag Mile Capital delivers tailored services that profoundly impact both their clients and the market, reinforcing their commitment to turning relationships into successful financial closings.
Contact Information:
Rushi Shah
CEO, Mag Mile Capital
Phone: (312) 896-8820
Email: rushi@magmilecapital.com
Website: www.magmilecapital.com
Frequently Asked Questions
What financing was secured for the Hampton Inn acquisition?
Mag Mile Capital arranged a total of $15.9 million, which includes a senior CMBS loan of $13.9 million and a mezzanine loan of $2 million.
Who is the sponsor involved in this acquisition?
The sponsor for this acquisition is Nexgen Management, a firm known for its expertise in the hotel industry.
How does the financing structure benefit the sponsor?
This financing structure provides over 80% leverage on the purchase price, ensuring financial stability and maximum proceeds from the deal.
What unique aspects were involved in this financing deal?
The transaction highlighted the challenge of securing a small mezzanine loan in today's market, demonstrating the innovative approach of Mag Mile Capital.
How does Mag Mile Capital position itself in the market?
Mag Mile Capital focuses on delivering tailored financing solutions, emphasizing their ability to turn relationships into successful closings and thrive in competitive market conditions.
