Mag Mile Capital completed an interest-only bridge loan for the acquisition of the Chicago Marriott Northwest in Hoffman Estates, Ill.
The Ghoman Group, based in Indianapolis, came to Mag Mile Capital to finance the acquisition of the 295-room hotel in the northwest suburbs of Chicago. The borrower has extensive hospitality experience, and due to a seller dispute and COVID-19 concerns, was able to purchase the property at a significant discount. Mag Mile Capital was able to arrange an interest-only, 24-month bridge loan with a 65 percent loan-to-value ratio. An interest reserve was also structured at closing, so the borrower will not have to make payments for 12 months.
“We were already signed up and days from closing this transaction with another lender when the COVID-19 pandemic hit the United States, resulting in that lender canceling all in-process deals,” said Rushi Shah, Mag Mile’s president and CEO. “With an acquisition deadline that ultimately was extended, there was immense pressure to find another lender to close the transaction at a time when virtually every lender in the market had red-lined hotels. Fortunately, we were able to successfully place the deal with a real estate private lender.”
“Despite the COVID-19 pandemic and what it meant for hospitality, the Mag Mile Capital team did not give up on this transaction,” said Harry Ghoman with The Ghoman Group. “They brought us to a new lender mid-closing, allowing us to close the deal and enter the Chicago market. We look forward to deepening our relationship and closing many more transactions with the Mag Mile team.”
The loan was closed with an 11 percent floor rate and can be paid off with no penalty after 12 months. The 18-year-old hotel is located at 4800 Hoffman Boulevard off Interstate 90 in the Prairie Stone Business Park, proximate to 6.5 million square feet of office space within a 7.5-mile radius. Public areas of the hotel consist of nearly 13,000 square feet of flexible meeting and event space.
“After demonstrating the value of the asset, the lender worked closely with us to close the transaction and enable the borrower to take control of the asset and begin renovating and repositioning the hotel property,” said Mag Mile VP Prabhat Jayara. “We will look to again refinance for the borrower once their business plan has begun and the debt markets once again accept hotel properties.”