Hotels & hospitality

$22.9 Million Non-Performing Loan | Spartanburg, SC

Spartanburg, South Carolina United States 29306
Asking Price
Area Size
NOI Net Operating Income N/A
NIY N/A

Attributes

Loan Status Non-Performing
Unpaid Principal Balance
Property Type Hospitality

Asset Description

Jones Lang LaSalle ("JLL") has been retained on an exclusive basis to arrange the sale of a $22.9 million non-performing mortgage loan (the "Loan") secured by a first-priority lien mortgage on a 247-key full-service hotel located in downtown Spartanburg, SC (the "Collateral"). The CMBS Loan was originated in December 2016 with a principal balance of $24.0 million ($97,100 / key) and was performing until May 2020, when pandemic restrictions and lockdowns led to the Borrower's default. The Loan provides a unique opportunity for an investor to acquire a COVID defaulted Loan and provides flexible resolutions via foreclosure or a Borrower workout.


Collateral for the Loan is a 247-room full-service hotel located in downtown Spartanburg, South Carolina. Standing 9-stories tall, the hotel is currently ranked #1 overall out of 33 hotels for the Spartanburg market, according to TripAdvisor. The Property operates under a franchise agreement that expires in January 2031 (9 years remaining). The Borrower's interest in the Collateral is a leasehold, with a right to purchase the Fee after August 2025. The Loan is currently non-performing and has a unpaid principal balance of $22,884,376.


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Investment Highlights

ATTRACTIVE BASIS: The Loan offers the opportunity to acquire a credit position on a preeminent asset within a growing southeastern market, Spartanburg, SC, at a total basis of $92,650 a key. The last-dollar basis is at a discount from the origination appraisal of $162,350/key (43%).


#1 HOTEL IN THE MARKET: When the Loan originated in 2016, in a guest satisfaction survey covering 339 like-branded hotels across North America, the Collateral ranked #6 overall with a guest satisfaction score of 72.1%. According to TripAdvisor, the hotel is currently ranked #1 overall out of 33 hotels in the Spartanburg market.


LEASEHOLD WITH OPTION: The Collateral is currently a leasehold with expiration in January 2061 (39 years remaining). Ground rent is fixed at $200,000 per annum through the life of the lease. The lease grants the Borrower the option to purchase the fee interest at any point after August 31, 2025.


FUTURE CAPEX PLAN: Despite being ranked #1, Management has plans for an upcoming renovation due to the vintage of the last renovation (2013). The current plans will primarily target guestrooms (40.5% of total) and F&B (21.3%).

Last Updated Date: 05 Jan 2022

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Last Updated Date: 05 Jan 2022

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