A $13.9 million loan for the conversion of an existing 99-room Best Western to a Home2 Suites by Hilton hotel in San Mateo, Calif., has been provided by MetroGroup Realty Finance. According to the Newport Beach, Calif.-based private commercial mortgage banking firm, the property was acquired by their client opportunistically on a very quick close with an acquisition bridge loan. MetroGroup’s initial $9.5 million funding retired the bridge loan and provided $4.4 million of future funds to execute the higher brand conversion.
The company closed on a floating senior loan on the property with a National bank based in Missouri. The loan featured a five-year term with a three-year floating rate period and interest only debt service during the construction and brand conversion followed by a two-year perm option upon stabilization. J.D. Blashaw, VP at MetroGroup Realty Finance, led the team in providing the facility.
“Our client has an established track record of hotel development and asset management and leveraged their long-standing relationship with Hilton to secure this property in a core market,” Blashaw said in a statement. “We were able to provide our client terms that fit their business plan and risk objectives. Our loan paid off the higher-rate acquisition loan significantly reducing their debt service, provided funds for construction and FF&E to meet Hilton brand standards and featured a favorable permanent loan option once the project is stabilized reducing future financing risk and transaction costs.”