CARLSBAD, CA – Summit Capital announced today it will begin analyzing the feasibility of financing transactions in order to place an approximate $380 million pool of non-recourse capital. Summit Capital’s role is to present the lender with commercial real estate deals, with an emphasis on hotels, based on preset parameters. The lender will fund transactions on existing high quality assets starting at approximately $20 million in loan dollars with a minimum debt coverage ratio of 1.25 on a 25 or 30 year amortization with a five year or a 10 year term.
“We believe this is the first capital of its kind to come out. This move signals the new beginning of CMBS in regards to the hotel real estate sector,” said John Stueber, president of Summit Capital. “At this stage of the game, the hotel industry needs a lender who is willing to move the ball. It’s got to start somewhere, and it starts with one LOI – and that’s what is happening here. It’s a step, and it’s in the direction we have all been waiting for.”
“There’s approximately $380 million available for hotel and commercial real estate assets. There’s room for roughly 17 or 18 deals and that’s it. Once that capital is used, the entity will securitize this capital pool and make a decision on whether this was a successful run or not. If it is, I expect that they will inject more capital into this type of financing again,” Stueber said.
