JACKSONVILLE, FL-NorthMarq Capital Inc. has arranged a $13-million construction loan for the 136-room Aloft hotel here. An executive involved in the deal says such loans are still being made for smaller projects through local sources that know the developers and properties best.
"All banks are struggling lately, but the smaller ones still have the ability to lend," Dimpesh Darjee, vice president at NorthMarq's Parsippany, NJ office, tells GlobeSt.com. He says Minneapolis-based NorthMarq has closed several deals involving limited-service hotels this year, with loans averaging around $15 million.
The Summit Group Inc. is developing Jacksonville's Aloft, a new flag within the Starwood Hotels & Resorts Worldwide Inc. The hotel is set to open early next year as part of RiverCity Marketplace, a mixed-use development taking up 465 acres.
Darjee says the loan for Aloft involved various challenges, including the current turmoil of the lending environment, Florida's lagging economy and an as-yet-unproven hotel brand. He says NorthMarq was able to convince one of the lenders that Summit Group has a strong track record in hotel development.
Darjee also notes that regional and community banks are more inclined to finance smaller hotel projects within their own markets and often have an already established rapport with developers there. On the other hand, full-service hotels in larger metropolitan areas are having greater difficulty obtaining financing because major banks are less inclined to make loans, he says.
In addition to Aloft Jacksonville, Darjee says NorthMarq arranged $7.9 million in financing for a new Holiday Inn Express in Wilmington, NC. The limited-service hotel will have 87 rooms in a three-story structure.
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