Aries Capital Achieves Triple-Play for Innisfree Hotels: Borrower Scores Over $43.2 Million in Debt & Equity Financing, Plus a New Joint Equity Partnership
CHICAGO –Aries Capital has secured $36,000,000 in permanent debt and $7,200,000 in preferred equity for repeat client Innisfree Hotels’ Hampton Orange Beach in Orange Beach, Alabama. The capital from the JV- financing subsequently enabled a joint-equity partnership between Innisfree and another Aries’ client, Janee Hotel Corporation, to purchase the Killington Mountain Lodge, a former condo hotel in Killington, Vermont, and convert the property to a boutique hotel.
These mark the sixth, seventh and eighth transactions that Aries Capital’s Jeff Bucaro, executive vice president in the firm’s Chicago office, has obtained for Innisfree since 2012, bringing the total amount financed on behalf of the Gulf Breeze, Florida firm to over $187,000,000.
In the first of these most recent transactions, Bucaro closed a 10-year, non-recourse, $36,000,000 CMBS loan for the refinance of the Hampton Inn & Suites in Orange Beach, Alabama. Built by Innisfree in 2010, the 160-key hotel was originally funded with a full-recourse construction loan that was cross-collateralized with an adjacent land parcel. Innisfree contacted Aries Capital when its existing lender offered them the opportunity to pay off the land loan early at a deep discount.
“The cross-collateralization of the two properties restricted the borrower’s use of the hotel’s profits,” said Bucaro. “By refinancing the loan, Innisfree received cash-out funds above its cost basis and was able to pay off the loan and retain the land unencumbered by any debt.”
As a follow-up to the CMBS loan, Aries secured an additional $7,200,000 in preferred equity on the same property, which provided Innisfree with capital to pursue future acquisitions.
Shortly after closing, Aries Capital brought Innisfree a joint-equity investment opportunity with Janee Hotel Corporation and Killington Hospitality Group for the acquisition of Killington Mountain Lodge in Vermont. The 103-unit condo hotel property is located at 2617 Killington Road in Killington, Vermont near the popular Killington Ski Resort.
Kenneth Moore of Naperville, Illinois-based Janee Hotel and John Kalish of Killington Hospitality had worked for two years to gain the consensus of the resort’s 77 individual condo owners to sell at a set price and place their deeds into escrow. In the eleventh hour, their capital partner dropped out of the transaction, forcing the firm to find a new partner that could provide the equity almost immediately.
“We recognized the value Mr. Moore and Mr. Kalish had created by successfully negotiating with the multiple owners, and felt the project would be an ideal fit for Innisfree,” said Bucaro. “Innisfree sprang into action and had their team at the property within a day.”
“The Killington Mountain Lodge acquisition was a perfect culmination of three related transactions that were orchestrated by Aries Capital. Due to our multi-transaction relationship over three years, both Aries Capital and Innisfree Hotels had the confidence in each other to execute a closing within days. Aries Capital was able to recognize a specific opportunity that warranted extraordinary effort,” said Innisfree CFO, Brooks Moore. “Our eighth transaction with Aries Capital was just as pleasant as the first seven. We have certainty of execution when we partner with Aries.”
As manager of the Killington Mountain Lodge, Innisfree plans to complete a multi-million dollar renovation of the Vermont hotel property, transforming and rebranding the hotel into a boutique, all-season resort.
“Aries Capital’s performance was outstanding. Jeff Bucaro navigated quickly through the due diligence process and identified the perfect partner in Innisfree to join the acquisition,” said Kenneth Moore, president of Janee. “Jeff and the Innisfree team worked around the clock to get this deal completed. Now we can look forward to the transformation of the Killington Mountain Lodge to a world-class boutique hotel.”
About Aries Capital
Aries Capital, (www.ariescapital.com) is a national full service commercial mortgage and real estate investment banking firm with offices in Chicago, Peoria, Houston, Phoenix and Miami. Since 1991, Aries and its affiliates have arranged and/or directly funded over $5 billion in debt and equity for office, retail, multifamily, healthcare, hotel/lodging, industrial and special‐purpose properties in the United States and Caribbean. The company, through its affiliates such as the Urban Development Fund (www.urbandevfund.com), has also provided over $500 million in tax credit and mezzanine financing. Aries provides permanent and interim financing through direct correspondent relationships with Wall Street CMBS lenders, life companies, hedge funds, regional banks and other institutional investors.
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