The terms of the financing are as follows:
- The first 18 months during construction will have mortgage payments that are interest only, priced at the prime interest rate plus 0.50 percent (currently 4.50 percent) per annum, adjusted quarterly.
- Upon completion of construction, the loan payments will convert to a 25-year fully amortizing principal and interest monthly loan payment schedule.
- The interest rate of the permanent loan will be fixed for five years, then adjusting every five years.
- The interest rate will be priced using the five-year SWAP rate plus 3.55 percent (currently 5.55 percent) per annum.
- The loan amount was sized using a 75 percent Loan to Cost ratio, and there is no prepayment penalty after the first five years of the loan.
The soon to be built five-story Tru by Hilton hotel will feature 98 guestrooms on 2.1 acres of land located at 2140 West Lucas Street, Florence, S.C. The site of this new development is located less than one-quarter mile from Interstate 95 and is situated less than three miles from Florence city center. It is located just minutes from Darlington Raceway & Museum, Florence Regional Airport and Florence Civic Center.
Other nearby demand generators and attractions include The War Between the States Museum, Magnolia Mall, Pee Dee Farmers Market, Florence Art Gallery, Veterans Park, Francis Marion University Performing Arts Center, Florence Symphony Orchestra, Florence Little Theatre, colleges, universities, hospitals, manufacturing facilities, various businesses and corporate headquarters.
Tru by Hilton is a new affordable brand that is intended to particularly appeal to younger travelers called millennials who are in their twenties and thirties. Tru properties have a modern design, public spaces in which to work and socialize, and advanced technology. Tru is Hilton’s 13th brand and operates in the midscale hotel segment.
“It’s no secret that hotel construction lending is not as prolific as it was a couple years ago, even though the demand has certainly not diminished. The sponsor of this project is a respected multiunit and multi-brand owner and operator of successful hotels throughout the Carolinas. We know the lenders who are looking for new clients who fit this type of borrower profile to develop across the country new and very popular branded hotel concepts such as Tru by Hilton,” said Harry Spirides, president of Spirides Hospitality Finance Company, who led the debt placement team representing the borrower in this transaction.