The land in Dallas was bought for $18M in 2014 by Dallas CF Hospitality Associates, LLC. This was a JV with the current owner, but they were not the Sponsor.
This JV did not workout, so the land was transferred to VC McKinney Dallas Investment, LLC. This was a new entity of owner without the JV partner along with the $5.2M in Debt, in 2017.
VC McKinney Dallas Investment, LLC invested over $15M, not including the $5.2M Debt, to get the development “Shovel Ready”, while 3207 McKinney Hotel, LLC has $7M invested.
Now, VC McKinney Dallas Investment, LLC must sell the land for $15.750M to 3207 McKinney Hotel, LLC to raise capital due to COVID-19. The Lender, Maxim Capital, will not let the Debt transfer, so the $5.2M lien is part of the Purchase Price.
3207 McKinney had a $3M investor that left due to COVID-19, so more working capital is needed in order to close the acquisition.
We are looking for a Bridge Lender at $16M to close on the land, be the 1st position Senior Lender, and then be removed in 6 months by the Construction Loan. We would use the excess funds from the Bridge Loan as working capital to close the Construction Loan along with legal, GC, etc.