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CAI Investments Secures $93 Million Extension Loan for Westin Tempe

Las Vegas-based CAI Investments LLC – an asset manager, developer, and private placement sponsor – secured a $93 million extension loan for the CAI Tempe Hotel Partners Westin Hotel. The company says the extension allows it to continue enhancing the hotel, fostering market stability, and potentially benefiting from future interest rate reductions.

Development of the property was partially funded with nearly $25 million raised from accredited investors by CAI Tempe Hotel Partners LLC, a private placement offering launched by CAI in 2017.

CAI told The DI Wire it believes this positioning increases the hotel’s chances for success and aligns with the initial investment goals.

The Westin Tempe, constructed during the pandemic amidst significant economic and supply chain challenges, officially opened in October 2021. Since then, the capital markets have faced pressures due to the rapid rise in interest rates, ongoing global market uncertainty, and geopolitical conflicts such as the wars in Russia-Ukraine and Israel – all of which impacted the availability of refinancing and exit options.

Noting these strains, CAI missed a $5 million loan payment on the Arizona hotel in December 2023. It had gotten all the way through loan documents for a commercial mortgage-backed security refinance with Bank of Montreal but ultimately decided not to move forward due to cost.

The company explored several term sheets from lenders to private debt funds, including a loan from a private equity firm headquartered in Tel Aviv. This option was stalled when the Hamas-Israel war broke out and then later deemed too expensive.

Through continuing negotiations, CAI was able to secure a loan extension from the original construction lender, Hall Structured Finance of Dallas, and avoid a foreclosure sale in April 2024. This extension permits an additional extension option and has no prepayment penalty.

Hall originated an $86.5 million construction loan for the development in 2019. With the new loan secured, CAI plans to implement a multifaceted strategy. This includes options for permanent refinancing, an outright sale with increased net operating income, or the potential establishment of a Delaware statutory trust offering.

“We are open to these and any other opportunities that may be presented that will benefit investors,” said Christopher Beavor, chief executive officer and founder.

“We have never stopped actively pursuing options for this fantastic property located in a growing city. We know that this is a strong asset,” Beavor added.

In March, CAI told The DI Wire that the hotel’s profitability is expected to increase by approximately $3 million in 2025 and with the combination of growing profitability, as well as interest rate reductions, the hotel could achieve more than $40 million in value creation over the next 18 months.

The 18-story, 290-room Westin, which sits near Seventh Street and Mill Avenue is within walking distance of Arizona State University and enjoys views of ASU’s Sun Devil Stadium, as well as Camelback Mountain. The site, which has 21,000 square feet of event space, is home to several dining options and near downtown arenas and entertainment.

Headquartered in Las Vegas, CAI Investments is a vertically integrated sponsor company that finances, develops, and manages commercial properties across the United States.

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