Axilla Capital Obtains 82% Loan-to-Cost Financing for
the Acquisition of the Holiday Inn & Suite Ann Arbor
TROY, MI (March 23, 2016) – Axilla Capital, LLC announced today that it arranged a $9.8 million first mortgage and mezzanine loan to finance the acquisition of the Holiday Inn & Suites in Ann Arbor. The capital structure represents 82% of the project’s total costs, including the borrower’s purchase price and the costs to renovate the property in accordance with IHG’s Property Improvement Plan (PIP).
“This was one of the more complex transactions we have worked on to-date,” says Mazur. “We had to simultaneously tackle a confluence of obstacles.” Mazur points to such issues as the PIP amount to new nearby hotel supply discovered during the underwriting process. Moreover, adds Mazur, the current market conditions in the CMBS space are some of the most difficult in recent history. Mitigants were the borrower’s substantial experience developing, owning and managing hotels in the region and a strong Ann Arbor market with a diversity of demand drivers.
“Despite all the challenges, we effectively managed the process, negotiated several key provisions in favor of the borrower and ultimately closed the transaction, all at a time when lenders were pulling out of the market and substantially re-trading terms,” says Mazur. “It’s a testament to our experience specializing in the hotel sector and our understanding of the nuances within the CMBS marketplace.”
The Holiday Inn Ann Arbor, which opened in 2006, features 107 rooms, a restaurant and lounge, 1,298 square feet of meeting space, an indoor pool and whirlpool, a fitness room, a business center and vending areas. The subject property is located just a half mile from the University of Michigan’s South Campus athletic venues, two miles to Michigan Stadium and a short drive from Downtown Ann Arbor. The street address of the Holiday Inn Hotel & Suites Ann Arbor is 3155 Boardwalk Drive, Ann Arbor, Michigan, 48108.
About Axilla Capital, LLC
Axilla Capital, LLC is a leading commercial real estate finance and advisory company that specializes in arranging debt, mezzanine and equity capital for hotels, multifamily, office, retail, industrial and self-storage properties. The company’s principals have a combined track record of closing more than $2 billion of transactions. Website: www.axillacapital.com