146 Key Flagged Hotel Bridge Loan

Deal Summary

The Situation

The owner of a 146 key Magnuson Grand flagged hotel needed short-term capital to reposition the property and address deferred maintenance items required by the franchisor's property improvement plan. Traditional bank lenders were not an option due to the transitional nature of the asset.

The Challenge

Flagged hotels in transition carry a unique underwriting complexity, the flag agreement ties revenue projections to brand standards, but the property's current condition fell short of those standards. Most conventional lenders passed on the deal.

The Structure

CapitalAx sourced a family office lender willing to underwrite based on the property's post-renovation potential and the borrower's operational track record. The loan was structured as a 12-month interest-only bridge at $6,200,000.

The Solution

By packaging a detailed PIP timeline, contractor bids, and a post-renovation RevPAR analysis, CapitalAx gave the family office the confidence to fund. The deal closed in under three weeks from term sheet.

The Outcome

The borrower completed the renovation on schedule, brought the property into full brand compliance, and began the process of refinancing into permanent CMBS debt at materially better terms.