NEW CONSTRUCTION FRANCHISE HOTEL CONVENTIONAL LOAN STANDARDS

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 New Construction/Development Franchise Hotel Loan Program

                                                                

 

Loan Leverage 80-90% LTV Hotel & Multifamily  

                                                                

Eligible Property Types:  

Hotel, Multifamily (vertical & garden) Assisted Living & Mixed Use

 

Loan-to-Value:       Maximum 80-90% LTV Hotel and Multifamily

Rate:                         Loan Rate Index  10 yr Treasury Bond Rate; Margin 2.25-2.50

LTV:                         90% Brick and Mortar; Land Parcel Equity.

Soft Costs:               15% of Total Projected Project Budget 

Loan Amount:        $8-$100 Million US Hotel and Multifamily  

Amortization:        20-25-30 years Permanent (Apt loans 30 yrs)  

Loan Term:             18 Months Construction Development Interest Only.  

Commercial Subordinate Option:  

Bridge Loan and Mezzanine  Loan Finance Option on Franchise Project Cost Overruns Working Capital and Capital Improvement and Hotel Resort Casino Equipment.

Project Requirements (upfront)

Designated Project Architect AIA and General Contractor Credentialed and Experienced. Loan Processing Timeline Typically 60-90 days to closing. 

Borrowing Entity:  

Partnership LLC, Subchapter S or C & D Incorporated; Bankruptcy remote single asset collateralized special purpose entity. 

Recourse:  

Loan shall be non-recourse, with standard carve outs contingent on General Contractor project surety or completion bond. 

Financial Documentation:  

General Contractor Contract, Projected P&L 5 yrs, Balance   Sheet, Cash Flow Projected, Franchise Hotel Agreement Status, Architect Designate, Feasibility Study Report, Environmental Phase 1, GeoTech Soils Report, Brick & Mortar Cost Analysis, FF&E Cost Analysis, Documents of Incorporation or LLC with full disclosure of Partners Ownership Percentage, LOI or Contractual Agreement, Proforma 5 yrs Occupancy & RevPAR NOI, Rent Roll, Expense & Vacancy.  

Processing Documentation:  

Feasibility Report, MAI Appraisal, EPA Phase I (Phase II & III) Seismic (CA,OR,WA), Land & Building Survey, Easements, Ingress and Egress, Attorney Opinion Letter,  Hotel, Restaurant/Lounge. Beverage Control License for liquor sales, Settlement Statement, Franchise Agreement Royalty Confirmation, Lender Tri-Party Agreement, Property Historical Disclosure. 

Construction Development Borrower Schedule: 

 

a)  Land Contract executed with a study option period recorded & Zoning Confirmation. 

b)  Architect AIA building design 3-D along with Plans & Specifications.

b)  General Contractor bid sheet analysis and selection of GC in advance.

c)  Hotel Franchise letter-of-approval and PIP contingency if conversion.

d)  Feasibility Study Report combined with MAI Appraisal Market Valuation,

e)  Geo-Tech Soils Report combined with Environmental Phase1 Report

f)   Survey Building Footings.

g)  Architect designated project professional architect plans  & specifications.

h)  General Contractor, Architect AIA and Franchise/Lienholder communication.

i)   Closing Date scheduled with development in preparation.