Crowne Tower Apartments – Mezzanine Debt

Baltimore, MD

Download Offering Memorandum

Co-Manager

Vivo Investments Group, LLC

Asset/Strategy Type

Hotel-to-Multifamily Conversion

Minimum Investment

$50,000

Debt

Investment 1

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Total Mezzanine Loan Amount:
$4,000,000

Interest Rate:
11% net to investors

Minimum Interest:
Monthly

Payment Frequency:
18 months

Loan Term:
40 months, with two six-month extensions

Fees:
1% origination + 1% exit

1 This summary is incomplete. Each prospective investor should review the equity Offering Memorandum and the Mezzanine Financing Executive Summary, which collectively include additional details about the Loan terms, Loan structure, Property, Project, and investment risks. Coupon rate is 12% fixed, with a 1% servicing spread to Fairway America, LLC.

Mezzanine Debt Structure1

Fairway America, LLC (“Fairway”) is offering fractional interests in a secured promissory note (the “Note”) issued by Vivo Living Baltimore Mezz Borrower, LLC (the “Borrower”) to Fairway for the benefit of individual investors in the Note (the “Co-Lenders”). Each Co-Lender will own an interest in the Note prorated to its dollar amount invested. The Note will be secured by a pledge agreement, whereby equity investors in Vivo Living Baltimore LLC (the “Company”) pledge their membership interests in the Company as collateral for the Loan. The Note will be paid current, monthly, with a minimum equivalent interest of 18 months of term.

Property and Project Details1

Fairway America Management Group IV, LLC (“FAMG”) and Vivo Investment Group, LLC (“Vivo”) (collectively, the “Co-Managers”) intend to acquire a two-tower high rise hotel property (the “Property”) operating as a Radisson and a Holiday Inn in Baltimore, MD, and convert it to multifamily housing (the “Project”) as part of the Co-Managers’ distressed hospitality-to-workforce housing conversion strategy.

The Project will be the 20th investment the Co-Managers have acquired together. These include multiple acquisitions through the Fairway Vivo GP Fund LLC (the “GP Fund” or “Manager”), which targets functionally obsolete limited-service and extended-stay hotels in markets with few quality affordable housing options that can be acquired at what we believe to be an attractive all-in cost basis. The Co-Managers seek to convert the hotel property into affordable studio, one- or two-bedroom apartments. Once the conversion is executed, the Co-Managers intend to recapitalize or sell the Property.2

Download Term Sheet

outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza

Property & Renovation Summary2

Address
105 West Fayette Street
City, State
Baltimore, MD
Year(s) Built
1967
Hotel Keys (Existing)
710 Hotel Keys
Post-Converted Units
506 Apartment Units
Number of Floors
North Tower (Radisson) - 23 Floors | South Tower (Holiday Inn) - 27 Floors
Average Unit SF
438 SF
Rentable Square Footage
239,095 SF
Parking Stalls
300 Stalls
Projected Hold Period
40 Months
Total All-In Cost
$64,508,827

Investment Summary

  • Holiday Inn tower was originally developed as apartments, allowing for efficient conversion back to its original use
  • Strong submarket performance evidenced by lack of competing new buildings under construction, high occupancy rate for comparable units, and high rent growth3
  • Well-located to meet renter demand near major employers and entertainment hubs, including Camden Yards, a 45,971-seat Major League Baseball stadium (0.7 miles from the property), the University of Maryland Medical Center (0.8 miles from the property), and Johns Hopkins University (3 miles from the property)
  • Acquiring at what the Co-Managers believe is an attractive basis, lower than replacement cost for local high-rise multifamily product

Why Hotel-to-Multifamily Conversions?

FAMG and Vivo believe that recent and current pressures on the hospitality real estate market, combined with an undersupply of work-force level multifamily housing throughout the U.S., create a unique and significant market opportunity to acquire hotel and motel properties at attractive prices nationwide and repurpose them into a more attractive asset class

To read more about Hotel-to-Multifamily conversions, click here.

2 There is no guarantee that the business plan, including timelines, targeted capital events, renovation plans, management strategies, or sources/uses of capital will actually be achieved. The business plan has not been finalized and is subject to change.
3 Downtown Baltimore Submarket , Class B Multifamily, CoStar Analytics, Q1 2022
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza
outside image of Bellaire Medical Plaza

Interested in the Baltimore opportunity? Please click below to request an Offering Memorandum, an appointment, or if you have questions.

Download Offering Memorandum

Express Interest