The Meridian Hotel & Spa
Acquisition financing for middle market boutique hotel
The Challenge
What the sponsor faced.
Sponsor was acquiring a 280-key boutique hotel in downtown Austin off a distressed seller. Trailing RevPAR had recovered to 92% of 2019 levels but remained 8% below peer set. Lenders wanted stabilized cash flow; the thesis required underwriting a 24-month brand conversion and repositioning.
The Structure
How we structured it.
Acquisition loan from a CMBS shelf at 55% LTV on T-12 NOI, structured with a PIP reserve and a brand conversion milestone that released additional proceeds on flag change. Priced at SOFR plus 325 bps with a 5-year term and two extensions.
The Outcome
What the sponsor got.
Closed in parallel with the brand conversion negotiation. Repositioning completed on plan. Asset re-traded 22 months later at a valuation that returned 2.1x sponsor equity.
Deal Mechanics
Structural highlights.
Closed with brand conversion as a milestone unlock
PIP reserve structured outside the loan balance
Exit achieved 2.1x sponsor equity in 22 months
More in Sector
Related hotel transactions.
Refinancing of middle market luxury ski resort property
Bridge financing for middle market historic hotel renovation
Bridge loan for middle market extended-stay hotel conversion
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