SpringHill Suites by Marriott

Construction/Mini-permanent Loan Financing
SpringHill Suites by Marriott – Lansing, Michigan

Milestone Realty Services worked in a mortgage brokerage capacity to procure construction and permanent financing for the development of a 104-unit SpringHill Suites by Marriott hotel located on the west side of Lansing, Michigan.

Property
The SpringHill Suites by Marriott is a 104-unit first class limited service hotel located adjacent to Interstate 96 in Delta Township. This property is a joint development between regional hotel developers, a Michigan-based construction company, and a local real estate development firm. The hotel is only the fourth SpringHill Suites by Marriott to be built in the State of Michigan.

Owner Objectives
Milestone was approached by a regional hotel developer, who sought Milestone’s assistance in procuring construction and permanent financing in one of the most difficult hotel development financing markets in recent history. It was the objective of the Owner to rely upon the financial strength of the underlying partnership as well as the development and construction expertise of the development team to obtain financing. Milestone was retained because of its experience in and knowledge of the hotel industry and its contacts among the national and regional lending communities.

Solicitation
Milestone quickly ascertained the positive aspects of the project through its experience in hotel lending and the overall hotel market, and prepared a Request for Financing Proposal, a comprehensive offering package on the project which detailed the property’s proposed amenities, location, facilities, development team, and operating projections in a format that could be understood by national as well as local lending sources. Milestone’s extensive knowledge of lenders active in hospitality related projects and lending sources was important to this process as it significantly streamlined the initial phases of lender solicitation. Milestone utilized its vast network of national and institutional lenders to identify a permanent mortgage lender.

Negotiation
Milestone received and analyzed several proposals from construction and permanent lenders, met with these lenders, conducted site tours, and assisted in the flow of information. Milestone ultimately aided the developer in the selection of the lender. Milestone personnel have a significant background in the development, management, valuation, and financing of hotel properties, which proved invaluable in this assignment. During the course of this assignment, the loan structure and participants changed a few times and Milestone was able to adapt to changes in the project and to eventually persuade the permanent lender to also provide interim construction financing, saving the developers significant time and expense.

Closing
While many mortgage brokers’ services stop with a signed commitment letter, Milestone continued to work with the developer in the negotiation of a commitment letter, coordination of due diligence, and review of loan documents, all to ensure a timely closing. Milestone’s understanding of the project and its knowledge of the Lansing market and the hotel industry in general was a valuable asset in the successful completion of this loan.