Red Oak delivered $5,900,000 to refinance and renovate an existing hotel in Newport News, VA, roughly 40 miles outside of Richmond. The property at 950 J Clyde Morris Blvd. includes 126 rooms, which are being converted to a Quality Inn franchise under a new 20-year franchise agreement, with Suburban Extra Stay 41 rooms in two-story buildings set on 4.43 acres.
The borrowers bring 10 years of experience in hotel management and purchased the hotel at a discount two years ago. In order to execute their renovation plans the borrowers required short-term capital to finish the project. The rehabilitation encompassed many of the required franchise FF&E and upgrades.
The operators are located onsite full-time and own the adjacent Super 8 motel property. The renovations will take approximately six months to complete, at which time the borrowers exit plan is to refinance into a conventional loan.