Category Archives: Case Studies

Selling to the Next Generation

Sometimes in the business world, especially a family owned business, owners decide it is time for selling to the next generation.

The GRP Capital team worked hard with our clients to help them purchase this Florida hotel from their relatives. The price was very good, as is often the case in “arms length transactions”. Our clients are now ready to take over the full management of the property and reap all the revenues. The new owners are excited to do so, just in time for increased American travel.

Reasons for Selling to the Next Generation: 

• Current Owners wish to step back: The opportunity for selling to the next generation can be quite tempting. In doing so, the current owners can shed the responsibility of day-to-day management and operation. At the same, time, they also ensure that their younger family members have a path to accrue capital and credit.

• Younger Generation Exhibits Ability to Take Over Successfully: The younger generation is often quite adept at taking over the reins of leadership in their family businesses. Prior to the transfer, these younger owners need to accrue the required equity injection and develop a favorable credit rating. They need to be skilled, albeit young managers.

•  Selling to the next Generation Allows for Changes: Sometimes managers and owners need to make changes in order to increase revenue and hold down costs. These changes can be difficult for the older generation to take on. Examples of these innovations include updated software to track purchases and vendors, payroll systems, marketing campaigns and networking with the next generation.

Creating a Path Towards New Ownership:

Managing Partner Krishan Patel stated, “I was happy to help these clients transfer this hotel to the next generation. The younger family members are already highly skilled in accounting and hotel management. This property made it through COVID-19 and promises to provide good cash flow under their leadership.”

This loan took a bit of extra work to close. The loan process started before the pandemic and was paused by the lender. But there was a silver lining.  Due to the delay, our client was able to take advantage of the latest stimulus package. GRP Capital worked in tandem with the lender to see the loan through to closing, including underwriting the many other businesses owned by the client borrowers.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

SpringHill Suites in Texas Loan closes

GRP Capital is pleased to announce the loan closing for a SpringHill Suites by Marriott in south Texas.  A SpringHill Suites property is classified as an upper midscale chain by Smith Travel Research (STR). GRP Capital Managing Director Krishan Patel as well as GRP Capital President Rick Patel worked closely with the multiple partners, part of a syndicate who purchased the Texas hotel.  

Challenges and Strengths of a Syndicate Purchase: 

• Lots of moving parts: A syndicate purchase has many owners, and their percentage of ownership can vary. All lenders require at least some information on the members of the syndicate. Our dedicated loan processing department takes care of these details.

•  Working with Key Players: Because the partnership group was large, it was important to designate key players. The key players for this Springhill Suites received all of the emails from GRP Capital and then coordinated with their other partners when necessary. This kept the lines of communication clear and as simple as possible. And it worked!

•  Spreading Risk:  Syndicate purchases allow the risk of new businesses to be borne by a larger group of people. Syndicates can also mix experienced owners with new investors.

Krishan Patel upon closing this loan stated, “Closing this loan was very important to our clients. They were ready to enter this Texas market and had experience in the upper midscale niche of the hospitality industry. The partnership group was large, but the key players were organized and motivated and we enjoyed getting to know them.”  

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Fairfield Inn Refinance Closes

GRP Capital is pleased to announce the loan closing for a Fairfield Inn & Suites by Marriott in Southwest Florida. A Fairfield Inn & Suites property is classified as an upper midscale chain by Smith Travel Research (STR). Since the beginning of the COVID-19 pandemic, lenders have shown greater interest in budget properties. Therefore, closing this loan indicates that the lending market is widening. GRP Capital Managing Director Krishan Patel as well as GRP Capital President Rick Patel worked closely with the multiple partners and the lender to secure this complex, high value loan for our clients. 

Challenges and Strengths of an Upper Midscale Property: 

• Finding the correct pricing: A property like a Fairfield Inn & Suites competes among a larger spread. They compete with both the top and bottom echelon of properties. They have to find a way to price themselves to achieve solid ADR and occupancy, which requires constant attention to rates.

•  Proving value to the customers: Upper midscale properties, including this Fairfield Inn & Suites, have had to make changes during the pandemic. Some areas that required changes? A serve yourself breakfast buffet, open coffee areas in the atrium and even daily housekeeping duties.

•  Solid Management Practices:  Hotels that are in the upper midscale range typically face higher maintenance expenses and also multiple potential revenue sources, like meetings and conferences. It is critical for hands-on management to monitor expenses and capitalize on revenue potential.

Krishan Patel upon closing this loan stated, “Closing this loan was very important to our clients. They had kept the hotel functioning during the hard times of 2020 and 2021, but needed permanent financing ahead of a loan maturity. The partnership group was large and was comprised of very experienced investors and hoteliers, all of whom had input into the decision. Our job was to help organize the process, while allowing all of the partners to feel included in the closing.” 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Denny’s in California: Business and Real Estate Loan Closes

Business loans that combine business and real estate are attractive to lenders. GRP Capital Managing Director  Krishan Patel  led the team that closed this southern California restaurant loan.

Why Lenders Prefer Loans that Combine Business and Real Estate:

• One Word: Collateral Loans that combine business and real estate have significant collateral, which gird the deal. Many businesses can have ups and downs, especially as the pandemic continues to evolve. Very few businesses are immune from these economic vagaries. However, real estate tends to be more stable.

•  SBA Guaranty: Small Business Administration (SBA) loans are dominating certain business sectors. These include most hospitality loans. As an added incentive, SBA also shows preference for loans that combine business and real estate.

Clients Were New to SBA: 

Patel remarked: Our clients came to us after listening to our remarks at the AAHOA webinar following the passage of the original SBA stimulus package. Our clients, despite being very experienced entrepreneurs, had never utilized SBA for their funding needs. They were eager, however, to secure a government guaranteed loan. In addition, they were looking to establish a new banking relationship. We knew just the lender for them, one that has found great success in closing SBA loans and was also nearby. Our clients were pleased with the results and told us “they appreciated our assistance in expediting this transaction.” 

GRP Capital secured a fully amortized, 25-year permanent loan with low interest rates.  The owners were able to lower their monthly mortgage. In addition, they benefited from a reduced mortgage payment for the first few months as part of the latest stimulus package. 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

GRP client buys La Quinta from large corporate seller

GRP Capital is pleased to announce the purchase of a La Quinta Inn & Suites in Southwest Florida from a large corporate seller. GRP Capital continues to help other qualified buyers who are purchasing La Quinta’s across the nation!

Krishan Patel , GRP Capital Managing Director, was pleased to close this loan. He stated, “This corporate seller has been in the news for their sales of multiple hotel properties. They have a very particular way of doing business. We were able to work closely with their representatives. As a result, our clients took possession of their hotel. They complimented us on the smooth and speedy closing. We are ready to assist other clients who see these assets on the market and are ready to add them to their portfolio.” 

Tips for Purchasing Property from a Large Corporate Seller: 

• Do your due diligence:  Research the property, its profitability and its market share. Try to ascertain why the corporation is putting the property on the market. If you can, utilize published corporate documents. Try to determine if there are any significant issues that brought these properties to the cutting board.

•  Be Organized and Focused: Prepare yourself for the sale, even before you extend an offer.  Your personal and business financials should be in good order. File your taxes or request an extension. Demonstrate with appropriate documents how you will pay for the property with bank statements that show you have the funding on hand. Sometimes, large corporate sellers have a strict timeframe to closing, so any delays on your part could be costly.

•  Gather Your Professional Team: GRP Capital will help you by finding the right lender match. Of course, we will work directly with them and the corporate seller. At the same time, you’ll need to have strong support from your attorney, your accountant as well as trusted insurance and title professionals.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Partnership Loan: Complex but Closed!

A partnership loan is very common. A partnership loan allows its members to pool their resources and talents to divide up the costs and responsibilities of a new business endeavor. GRP Capital is pleased to announce that Managing Director  Krishan Patel has just closed a loan on a large partnership for a new property in New Mexico.

While a partnership loan may be common, it can make a closing more complicated.

Typical complications in partnership commercial real estate transactions:

• Who will be officially managing the business? For this deal, two of the six partners agreed to be the managers. Their operation agreement clearly stated this setup. At signing, only the managers had to sign the full loan documents, while the other partners just had to sign guaranty paperwork. We even arranged for out of state signings.

•  How will equity injection be handled? For this loan, the partners were extremely organized about getting bank statements that were clean (free of large hard-to-trace deposits in the last three months) and using those to contribute their equity. It is very important for partners to be transparent with each other about their sources of equity. They need to be sure that their equity contributions  will be be acceptable to the lender.

How We Knew this was a Good Partnership:

Patel remarked, “I was very pleased to get to know this group of motivated, bright entrepreneurs. To be sure, they had carefully thought through many aspects of their purchase. Consequently, they contacted us to take this loan from letter of intent to closing as smoothly as possible. In order to meet their needs, we communicated with them regularly and they appreciated the transparency of the loan operations. They were model clients: organized and responsive.” 

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates.  The partners took possession of the property and are ready to make this business even more profitable in the future. In addition, the partners are able to benefit from a lowered mortgage payment for the first few months as part of the latest stimulus package. 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Multiple Closings: Two in One Day

Multiple closings don’t happen every day at GRP. But they happened last week. GRP Capital’s  Senior Associate Ryan Dumas and our entire team were able to close two loans for two very different clients.

Ryan Dumas excitedly noted, “I was very happy to close two loans in one day for two very different sets of clients. It was the culmination of a lot of work. Our clients will benefit from permanent financing, featuring low interest rates. I loved getting to know these clients and helping them fund their dreams. They are all skillful entrepreneurs and will be maximizing the profit potential of these properties very quickly.”

Multiple Closings for a Variety of Clients:

• Small and Large Properties. Both of these properties had a large number of guest rooms (130 for one and 171 for the other). But we also recently  closed an intimate Bed & Breakfast. Our knowledge of the varieties of properties and how they function allow us to give expert advice to our clients and work in tandem with our lending partners.

• Geographic Diversity? Yes! One of these properties was in Florida and the other in Maryland. We have closed loans in most of the United States, working with a national team of lenders from coast to coast and all points in between.

•  Franchise vs. Independent:  One of these loans was affiliated with a franchise and the other was an independent hotel. We have relationships with franchise networks and know all of the steps that have to be taken to close a loan in concert with the franchise. We also know how to present a loan to a lender for an independent property, even one that doesn’t participate in STR (Smith Travel) reporting.

Loan Structure:

•  Purchase and Refinance: Both purchases and refinances require different processes, but our clients need our expertise in both types of loans. Purchases are typically more complex loans, involving sellers, too. But all loans require us and the lenders to understand the clients’ business goals. Multiple closings happen when we at GRP successfully match our clients with appropriate funding sources. We believe we can match our clients with lenders who believe in our clients’ unique visions.

• Single Owner vs. Multiple Partners: These two loans also had different client makeup. One loan had a single owner while the other loan featured multiple partners. Coordinating with all stakeholders is integral to closing the loan successfully. Streamlined communication and a strong loan processing department allow us to handle multiple closings.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Fast Closing for Hotel Purchase in Colorado

GRP Capital is pleased to announce that Managing Director  Krishan Patel executed a fast closing on a hotel purchase loan for our Colorado client.  

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates. Because the previous note on this property was a Small Business Administration (SBA) 504 loan, time was of the essence. SBA 504 notes can only be paid off on one day per month (typically the third Thursday). We knew a fast closure was critical and were able to close 21 days from LOI to funding. A fast closing also ensured that the this loan was eligible for SBA’s 6-month subsidy. As a result, our clients have no payments for the first six months of the loan. 

Patel remarked, “We know these clients very well, as we recently closed another loan for them. When we realized we would only have 21 days to close this loan, we knew we had to work as partners. We used as many of the previous documents we had gathered from our previous work with the client. For their part, our clients were incredibly organized and responsive, turning in documents and information quickly. As a result, the lender was also responsive and quick-moving. We were thrilled that we could accomplish this fast closing, saving our clients six months of loan payments.” 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Smooth Path to Closing in Oklahoma

How do you get a smooth path to closing? Take a motivated seller, an organized buyer, an enthusiastic senior associate and add in our loan processor. What’s the result? Another quick closing is in the books.

GRP Capital Senior Associate Ryan Dumas was able to shepherd this hotel loan from letter of intent (LOI) to closing in just 41 days. Everybody involved in the sale did their part to make sure we had a smooth path to closing.

Submitting Needed Documents:

• The seller provided the documents necessary (typically financials and hotel statistics and any applicable leases).

• The buyer had to prove that he or she has an appropriate debt coverage. Our clients have to demonstrate the ability to contribute to the equity. They also have to be able to pay for business expenses that arise. In addition, the lender wants to know the the buyer has the appropriate management experience to supervise the operation of the new business.

• The lender also needs the appropriate documents about the business formation and licenses.

Submitting documents quickly allows the lender to underwrite the file quickly. Once the underwriter is satisfied with the documents, they don’t need to  come back for more supporting documents and more updates. This keeps the document requests manageable for everybody.

What are Equity Verification Documents?

• Bank statements

• Stock and bond fund statements and/or money market accounts 

• Closing documents/settlement statements  from previously sold property

GRP Capital secured a fully amortized, 25-year permanent loan. As a result, our client was able to take advantage of continued low interest rates. 

Our client was thrilled with the smooth closing. He has solid plans to increase profitability and is ready to follow his plan.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Low Interest Loan for LA Hotel

GRP Capital is proud to announce another loan closing, taking advantage of historically low interest rates.  Senior Associate Ryan Dumas and his team worked with the borrower and the lender to refinance this independent hotel. The borrower was able to refinance a higher interest existing loan. In addition, our client obtained funding in order to embark on some needed renovation. 

Our client previously had a higher interest private loan that she was ready to refinance. Her new 25 year permanent loan product provided manageable, stable financing with sustainable payments for the life of the loan. Refinancing allowed our client to decrease her monthly mortgage payments. Even better, our client immediately utilized the project improvement plan (PIP) monies to complete deferred maintenance and updated furnishings.  

Independent hotels can still receive financing in these uncertain teams, even in California. Our job at GRP Capital is to advocate for our clients. We work to demonstrate the strong management skills of the property owner (or management team). In addition, we partner with our clients to organize their files in order to emphasize the true profit potential of their business. We understand that each property is unique and we pride ourselves in getting to know our clients, their enterprises, and their distinct financing needs. Finding the right loan product and the appropriate lender requires research on our part. That research entails learning about our clients as entrepreneurs. As a result, we secure options for them that will best serve their business needs for growth, stability or even liquidity.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.