In 2012, the Company entered into the following term debt arrangements:
- On January 12, 2012, the Company entered into a loan with Empire Financial in connection with the Atlanta, GA Courtyard acquisition. The principal loan amount was $19.0 million and the maturity date is February 1, 2017. The loan bears interest at a fixed rate of 6.00% per year.
- On February 13, 2012, the Company consolidated and refinanced four loans with ING Life Insurance and Annuity Company into a single term loan of $67.5 million and the maturity date is March 1, 2032. The loan bears interest at a fixed rate of 6.10%. This loan is callable by the lender beginning March 1, 2019.
- On February 14, 2012, the Company refinanced a loan with Metabank of $7.0 million with a maturity date of February 1, 2017. The loan bears interest at a fixed rate of 4.95% per year.
- On March 2, 2012, the Company obtained two term loans from General Electric Capital Corporation in connection with the two Birmingham, AL acquisitions. The loan amounts were $5.6 million and $6.5 million, with both loans having a maturity date of April 1, 2017, and bear a fixed interest rate of 5.46% per year.
- On April 4, 2012, the Company refinanced two loans with GE Capital Financial, Inc. formerly financed with National Western Life Insurance; mortgage loans associated with the Scottsdale, AZ Courtyard and the Scottsdale, AZ Springhill Suites with loan amounts of $9.8 and $5.3 million, respectively. Both new loans bear interest at a fixed rate of 6.03% and have a maturity date of May 1, 2017. The transaction resulted in an interest rate reduction of 197 basis points as compared to the previous loan’s interest rate and $1.5 million of net proceeds from the refinancing after repaying the two previous loans including a prepayment penalty of $0.5 million.
- On June 24, 2012, the Company refinanced a loan with Chambers Bank of $1.5 million, which bears interest at a fixed rate of 6.50%, and a maturity date of June 24, 2014.
- On June 29, 2012, the Company refinanced a loan with Bank of the Ozarks of $8.9 million which resulted in $2.5 million of net proceeds after exercising the earn-out provision on the loan. In addition, the revised maturity date on the loan is July 10, 2017. Lastly, the interest rate was fixed at 5.75% for years 1-3 and will reset annually at LIBOR plus 375 basis points with a floor of 5.50% in years 4-5.
The Company invested $28.0 million in 2012 on renovations, $11.0 million of which was deployed during the fourth quarter. The renovation scope varied among the 13 properties completed in 2012. Projects ranged from lobby and public space improvements to complete guestroom renovation including all furniture, soft goods, and new guest bathrooms.
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