Legendary Capital, a sponsor of non-traded real estate investment trusts and other alternative investment offerings, has sponsored the 182-room Hilton Garden Inn Houston Bush Intercontinental Airport acquisition in a $19.5 million transaction.
The deal utilized Legendary Capital’s “Equity Preservation UPREIT (EPU)” structure – where the hotel’s owner contributed their property in exchange for a special class of transition partnership units.
The consideration included paying off the loan secured by the hotel, more than 651,000 transition partnership units to the contributor plus closing costs. The loan payoff was secured using a bridge loan while permanent financing is put in place.
“The Legendary Capital Equity Preservation UPREIT program is predicated on our attempt to transact in a difficult environment,” said Corey Maple, chief executive officer. “Through the EPU structure, the contributor receives immediate equity in our affiliated operating partnership and time for their property to restabilize.”
The hotel is located within close proximity to Houston George Bush Intercontinental Airport, the 15th busiest airport in the U.S.
“Having a hotel at a busy airport like Houston Bush Intercontinental gives us a built-in clientele,” said Dave Durell, Legendary Capital’s chief investment officer. “The airport is investing $1 billion into its expansion, which gives us even more confidence in this location.”
This is the third transaction Legendary Capital has sponsored in the past six months using its “Equity Preservation UPREIT” structure, following the recently acquired Courtyard by Marriott in Aurora, Colorado, and Holiday Inn El Paso Sunland Park in El Paso.
Through its affiliated entities, Legendary Capital has acquired 27 hotels, primarily targeting 80-to-200 room limited-service, select-service, full-service and extended-stay hotels in America’s heartland.