While commercial lending for hotel acquisitions has virtually dried up due to the coronavirus-induced implosion of the hospitality market, financing for new hotel developments are still coming through. And in the height of a pandemic, an extended-stay hotel next to a major hospital that’s within 15 miles of The Villages, may be the safest bet of all.
Citizens First Bank just approved a $10.95 million 20-year mortgage for Leaders Investment Group, the developer behind the Venetian Isle mixed-use project next to Leesburg Regional Medical Center. The loan will finance the construction of a $14 million TownePlace Suites across the street from the hospital.
HREC Vice President Paul Sexton said the banks are betting on two things. One, by the time the hotel opens in late 2021 the economy will have recovered. And two, hospital-adjacent hotels are recession-proof.
“The other part of it is, the banks don’t make any money unless they make loans,” Sexton said. “And at this point in time, development projects are probably one of the safer loans you can make.”
Berkadia’s Michael Weinberg said he’s not seeing any loan origination in Orlando or nationally, but some loans that were in the works are closing. “Most of the deals we’ve closed in the last two, three weeks were already in process and already committed by the lender, and so the lender is honoring their word and closing the loan,” Weinberg said. “And especially a loan like that, where it’s an extended-stay product adjacent to a hospital, that will probably follow through better.”
The hotel has been in the works for over two years. It’s the first phase of a 54-acre mixed-use district that straddles both sides of Dixie Avenue and includes medical offices, retail, an assisted living facility and apartments.
Leaders principals Hasan Mousli and Gus Kaloti transferred the hotel pad to a separate entity, Venetian Hotel Holdings, for $300,900 on April 3. Their general contractor, Pinkerton & Laws, filed a notice of commencement for the 4-story, 112-room hotel on April 6. Naples Hotel Group will manage the property.
The developer previously told GrowthSpotter they planned to start construction on the 280-unit apartment complex about 90 days after breaking ground on the hotel.
Mousli and Kaloti, meanwhile, have two mixed-districts underway in Winter Haven. Preserve at Lake Ashton is an approved Planned Unit Development on 370 acres, entitled for 1,700 dwelling units, an ALF, a mix of commercial uses and a community farm. The duo also plans Preserve at Lake Ashton North on another 83 acres, also planned for a mix of residential and commercial uses.