Portfolio Snapshot:

Two Adjacent Hotels, One Financing Solution

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THE RRA SOLUTION

$10,280,000 in Cross-Collateralized First-Position Bridge Financing

RRA structured two separate first-position bridge loans of $5,140,000 each, one for each property, cross-collateralized and cross-defaulted so that the two loans functioned as a single credit facility from a risk management perspective. The cross-collateralization structure ensured that neither property could be sold or refinanced independently of the other, keeping the portfolio intact and aligning the sponsor's incentives across both assets.

The combined $10,280,000 commitment provided the sponsor with full acquisition financing for both hotels plus a structured renovation program. The HVS appraisal at origination valued the TownePlace Suites at $5,000,000 as-is and $8,800,000 at stabilization, reflecting the significant value creation expected from the renovation and operational improvements. Stabilized projections showed a combined debt yield exceeding 14 percent.

EXECUTION

Active Renovation Programs and Portfolio-Level Asset Management

Both hotels entered active renovation programs during the loan term. On the Courtyard, renovation draws were funded progressively as work was completed and inspections confirmed progress, with the majority of the $2,600,000 PIP holdback ultimately drawn. The TownePlace Suites renovation was also underway, with draw requests for guest room and bathroom renovations funded by Algiere Construction Services through the summer of 2024.

Throughout the loan period, RRA monitored hotel operating performance on a regular basis, receiving monthly financial reporting from the sponsor and tracking occupancy, ADR, and EBITDA against projections. The Texarkana market provided the institutional demand base the underwriting had anticipated, with both properties posting consistent occupancy supported by the hospital and military demand that characterizes the submarket.

The sponsor carried both assets through the renovation period and into the following operating cycle. With renovation work progressing and the loan term running toward its conclusion, the sponsor moved to exit both loans simultaneously, consistent with the cross-collateralized structure that required the properties to be addressed together.

THE EXIT

Both Loans Repaid in Full, September 2024

Both loans were repaid in full on September 24, 2024, approximately 37 months after origination. The simultaneous payoff of both cross-collateralized loans reflected the portfolio approach that had governed the deal from origination.

The outcome validated the core thesis of the transaction: two well-located Marriott-franchised hotels in a market with durable institutional demand, acquired together and financed with a structure that kept them aligned through the renovation and stabilization period. RRA's cross-collateralized structure protected the fund's interest throughout the loan term while giving the sponsor the flexibility to execute a multi-property renovation program on a coordinated timeline.

Structuring two loans as a single cross-collateralized credit facility is a deliberate choice with real risk implications: it keeps a portfolio together through the investment period and ensures that a lender's exposure to one asset is not stranded by an exit on the other. For this transaction, the approach worked as designed. Both Marriott-franchised hotels were renovated, both performed within the market environment the underwriting anticipated, and both paid off together in September 2024.