Michael McCleary of Delray Beach-based Dockerty Romer & Co. arranged a $14.8 million construction loan for an oceanfront hotel in New Smyrna Beach.
Dockerty Romer, a commercial mortgage banking and real estate brokerage firm, announced that a Florida-based community bank made the loan to build a four-story, 114-room Springhill Suites By Marriott.
The bank loan has a fixed interest rate of 4.25 percent for five years. During the construction of the hotel, interest-only payments are due. Upon completion of the Marriott-branded hotel, the loan converts to a 25-year amortization schedule.
“Several local and national lenders threw their hat in the ring, but most were only able to offer floating rate during construction and not willing to fix the rate until the hotel opened for business,” McCleary said in a press release by Dockerty Romer.
“The developer and their investors were adamant in their need for a fixed rate from day one in order to avoid future interest rate risk impacting their IRR [internal rate of return] model,” he said.
Since its inception in January 2000, Dockerty Romer has closed almost $6 billion in real estate transactions.