Legendary Capital, a sponsor of non-traded real estate investment trusts and other alternative investment offerings, has sponsored a 175-room Holiday Inn El Paso Sunland Park acquisition in a $9.7 million UPREIT transaction.
The transaction utilized Legendary Capital’s “Equity Preservation UPREIT” mechanism, where the property owners contributed their hotel in exchange for a special class of transition partnership units.
The consideration also included the assumption of $7.9 million of the existing $8.4 million loan secured by the property and a $300,000 cash payment to the owner. Elevation Hotel Management LLC will continue to manage the property, together with NHS LLC, doing business as National Hospitality Services.
“The Legendary Capital Equity Preservation UPREIT (EPU) construct is predicated on our attempt to transact in a difficult environment. Through the EPU structure, the contributor receives immediate equity in our affiliated operating partnership and time for their property to restabilize in this turbulent period. At the same time, their asset is contributed into our affiliated operating partnership.” says Corey Maple, chief executive officer.
This is the second transaction Legendary Capital has sponsored in the past three months using its EPU §721 UPREIT contribution structure, following the recently acquired Courtyard by Marriott in Aurora, Colorado.
Through its affiliated entities, Legendary Capital has acquired 26 hotels, primarily targeting 80-to-200 room limited-service, select-service, full-service and extended-stay hotels in America’s heartland. The company sponsors Lodging Fund REIT III, a publicly registered non-traded REIT.