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Acquisition Financing

The Four-Points by Sheraton
Meriden, CT

The Four-Points by Sheraton in Meriden, CT was purchased by Welcome Hospitality, a New Jersey based hotel investment and management firm, with a high leverage acquisition financing package.

The Four Points by Sheraton Meriden is a newly renovated 150-room hotel, centrally located at the crossroads of Connecticut. The property was originally purchased by a NY-based private-equity group in late 2003 and was extensively renovated in 2004. Despite these upgrades, the property continued to under-perform expectations, showing a negative cash flow of $500,000 annually.

Andrew Benioff, now founder and senior managing partner of Llenrock Group LLC, worked on behalf of a predecessor firm to mitigate the negative cash-flow and secondary-market location issues by illustrating Welcome Hospitality’s proven track of turning around mismanaged properties. This enabled the lender to become comfortable with the deal and provide an aggressive 3 yr. floating-rate non-recourse bridge loan priced at 375 bps over LIBOR representing 94% of the purchase price and 75% of the total acquisition budget.

Raj K Patel of Welcome Hospitality said, “Andrew worked quickly and efficiently to produce results. The process involved multiple steps and multiple points of potential failure. He provided insightful comments and constructive prodding to keep the process from slowing down.”

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