Tower Capital recently arranged $3.25 million in financing for the acquisition of a 3.34 acre parcel of land beneath the 81-key Motel 6 located in Phoenix, AZ. The two-story project was originally built in 1965 and is situated near the Phoenix Sky Harbor Airport.

Tower’s client, a California based investor, originally acquired the hotel, which was encumbered by a land lease, from Motel 6 Corporate in 2020.  In order to gain fee simple ownership of the hotel, the borrower had to acquire the land from the owner.  The borrower had a quick close timeframe, and engaged Tower Capital to source the acquisition financing.

The borrower’s main objective was to obtain the maximum amount of leverage possible. After running a competitive process, Tower produced multiple options for its client, achieving 81% LTV.  Additionally, the borrower acquired roughly two acres of vacant land adjacent to the hotel, providing the borrower with multiple exit strategies, including a future redevelopment.