Currently Funding - Kimpton Hotel Development Site
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Loan Amount: $6,000,000
Collateral: First Trust Deed on 4 commercial parcels totaling 1.364 acres. The parcels are currently unimproved vacant lots, with entitlements to construct a multi-story business hotel.
Purpose: To purchase four contiguous parcels of land near downtown Reno, NV. Purchase price is $8,784,0000.
Property Description: Four parcels are located on banks of Truckee River in downtown Reno. The Borrower has been working closely with Kimpton (who has committed just under $2MM to the hotel construction), a national upscale business hotel chain, to develop a non-gaming property with high-end amenities in a very desirable area of downtown Reno. The project will also include 30 luxury condominium units, approximately 55,000 sq. ft. of Class “A” office space, 16,000 sq. ft. of meeting and convention space, a 25,000 sq. ft. spa/fitness/aquatics/ food and beverage area, and 540 parking spaces in an onsite parking garage.
Loan-to-Value: 57%, based on the “as-is” appraisal value of $10,540,000. as of October 21, 2019. The Appraiser used closed sales and pending sales in the Reno and Las Vegas market areas to determine the value of the subject property. 68.6%, based on the total land cost of $8,784,000. In addition to the land cost, the Borrower has spent approximately $361,000 on pre-development architecture and engineering costs related to the development of the property as a high-end business hotel. In addition, the Borrower will fund a little over $1,500,000 to close the land purchase with the seller carrying back a 2nd TD in the amount of $1,600,000. The seller's 2nd TD has a term of 4 months with our borrower paying down $1MM to that 2nd TD prior to the end of November 2019. leaving a balance on the 2nd TD of $600K and the borrower with nearly $3MM cash invested in the deal.
Interest Rate: 13.50% per annum, paid monthly.
Minimum Interest: 6 months minimum interest guaranty. No prepayment penalty after 6 months.
Term: 12 months, with one six-month extension option
Borrower/Guarantor Profile: Long time borrower with net worth of $51MM as of August 2019. Borrower is a well known Developer with many projects under his belt. The borrower has also just secured $85MM in construction financing along with $35MM in equity capital raise to build Hotel in Tempe, AZ.
Loan Servicing: FCI Loan Servicing will provide loan servicing at Borrower’s expense.
RISK DISCLOSURE All real estate markets can be negatively affected by interest rates, availability of capital, supply and demand factors, and general economic conditions both locally and nationally. The investor should review this proposal with these risk factors in mind, and base the investment decision on both existing market conditions and potential changes in the economy, as well as the investor’s personal objectives and risk tolerance.