Sacramento Hotel Purchased for $16MM as Part of Hotel-to-Multifamily Conversion

Tower Capital, Kalthia Group Hotels, Manas Hospitality, Harc Holdings, Sacramento, Holiday Inn Express
Courtesy of Tower Capital

(EDITOR’S NOTE: According to public records, the asset was sold in August of 2021 for $16 million, or about $121,212 per room. The seller was Manas Hospitality, LLC, which is affiliated with San Diego-based Kalthia Group Hotels. The buyer, MVC MF LLC, is an entity affiliated with Josh Wertlieb of Arizona-based Harc Holdings. As part of its business strategy, the firm seeks to transform hotels into new rental housing.)

Sacramento, CA, October 14, 2021- Tower Capital arranged a $23.2 million acquisition and renovation loan for a 132-key Holiday Inn Express hotel in Sacramento, CA that will be repurposed into a 129-unit, Class B multifamily community. The four-story project was originally built in 1979 and is located at Sacramento’s downtown convention center. 

“The sponsor’s conversion strategy aligns with Tower Capital’s objective of providing capital to commercial real estate investors who specialize in transforming underperforming hotels into attainable rental housing,” said Adam S. Finkel, CCIM, Principal and Co-Founder of Phoenix-based Tower Capital. “The sponsor has completed several hotel-to-multifamily conversions, capitalizing on the need for more workforce housing in infill locations, which have a high level of demand and are located in desirable locations with rising property values.” 

The sponsor plans to complete construction and convert all the units over a 12-month time-period. Additionally, leasing is scheduled to begin as soon as month 10. The unit mix will consist of 74 studio units, nine one-bedroom units, and 46 two-bedroom units. Renovations will include the addition of kitchens and washer/dryers, as well as improvements such as paint, fixtures, and countertops. 

Tower Capital’s non-recourse loan provides the borrower with a 36-month term at 85% loan-to-cost and includes funds for capital improvements. The loan was closed with a California-based debt fund that Tower Capital has completed more than $62 million in financing transactions with through August 2021.

About Tower Capital:

Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind. Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. The firm specializes in debt and equity placement ranging from $3 Million to $300 Million and has financed nearly $2 Billion for clients since inception. The company ranked 1,850 on Inc. 5000’s 2021 list of fastest growing private companies in America. Tower Capital focuses on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client. 

West Coast Commercial Real Estate News