Route 66 Ramada Hotel
This is a prefunded purchase for a 97-room Ramada Branded Hotel on historic Route 66. The subject property address is 3100 East Andy Devine Avenue, Kingman, Arizona.
The current borrower has been operating the property for 2 years under a lease with an option to buy. During this period, the borrower converted this property from a motel to a Ramada branded hotel using the Ramada property improvement plan system. This renovation was extensive and included a brand new sports bar and new pool area. The renovation has been completed already for the underlying property, totaling $2,176,000. Due to the branded conversion and renovation of the building, occupancy rates and room revenues have increased. The borrower is exercising his option from a previous agreement with the current owner for purchase. The borrower is requesting a loan of $3,200,000 in order to purchase and recoup some of his already invested rehabilitation money. The borrower will receive the full loan amount of $3,200,000 at closing of the underlying loan. The debt service coverage ratio is 1.96. The borrower plans to refinance within 18 months.
3100 East Andy Devine Avenue
- Purchase Price: $1,800,000
- Renovation: $2,176,000
- As-Is Value: $6,760,000
An independent third party appraisal shows an As-Is Value of $6,760,000 for 3100 East Andy Devine Avenue. The LTV ratio is 47.34% and is in line with the data we found during our due diligence process. Our research shows the commercial market surrounding the underlying property in this area of Kingman is stable and supply and demand are in balance.
3100 East Andy Devine Avenue was built in 1966, located in the suburban neighborhood of Kingman, Arizona. The property has 97 rooms, with a gross living area of 48,430 sq. ft. on a 184,684 sq. ft. lot. The property is near many comparable hotels and inns, fast food restaurants, car dealerships, retail super-centers, a golf course, and residential communities. It is also located on the crossroads of Route 66 and Interstate 40. The primary market for this hotel is a highway stopover destination for travelers and the transportation industry. The hotel sees room rentals from tourists as well as pre-bookings from tourism companies. Kingman, Arizona is situated 110 miles SE of Las Vegas and is near the Colorado river. It is also on the way to the Grand Canyon, making this a natural spot for a hotel. It’s neighbors include Holiday Inn Express and Marriott among others.
3100 East Andy Devine Avenue
Property renovations are completed already as to Ramada Inn’s property improvement plans. The following renovations are completed:
- Exterior painting
- New furniture
- New billboard
- New water line
- Pool – redo plaster and concrete
- Gym and conference room improvements
- Please see budget for more detail