Investment Banking - Americas - Success Stories

Investment Banking Successfully Arranges Financing for Canadian Boutique Hotel

Project

Trilogy Properties Corporation ("Trilogy"), a successful hotel owner/operator based in Vancouver, British Columbia, acquired the leasehold interest in the 136-room Hotel Godin ("Hotel") on July 9, 2007. This luxury boutique Hotel is strategically located in the heart of Montreal's entertainment district, within minutes of the central business district. In spite of its many positive attributes, the Hotel had suffered from a number of setbacks since it's opening in November 2004, which negatively affected its overall performance. Trilogy has a vast amount of experience and expertise in the boutique segment and sees the Hotel as an exceptional opportunity to create value.

The HVS Assignment

The lending market generally views a non-performing hotel with minimal cash flow as being difficult to finance. In a historically conservative lending market such as Canada, the unique nature of a non-branded boutique hotel provided additional challenges. HVS Capital Corp's mandate was to overcome these challenges and close the financing within the very tight acquisition deadline.

Results

HVS Capital initially conducted a careful assessment of the operating shortcomings that faced the Hotel and its prior owner. Without a liquor license at the Hotel, the prior owner made the decision to leave the restaurant space unfinished and vacant. This was a major setback because of the Hotel's strategic location within the entertainment district of Montreal. Furthermore, high turnover in the previous management team had negatively impacted the hotel operation. HVS worked with Trilogy to develop projections that were felt to better represent the Hotels full operating potential. Furthermore, HVS effectively conveyed the upside "story" to potential lenders.

HVS Capital Corp. was able to quickly arrange acquisition/bridge financing with a major US institution and assist Trilogy in the acquisition of the leasehold interest in the Hotel. The loan commitment was for $24,350,000 (80% LTC), interest only throughout the loan term.