$30,139,000 Construction Financing for an Office-to-Hotel Conversion; Tucson, AZ

Transaction Description:

George Smith Partners successfully arranged $30,139,000 in construction financing for the phased adaptive reuse of a landmark office tower into a 145-key upper-upscale lifestyle hotel with boutique-quality amenities. Located within a Qualified Opportunity Zone in the heart of Downtown Tucson, the Project is a focal point in the downtown skyline, offering unparalleled accessibility to numerous restaurants, bars, shops, and entertainment venues.

The financing capitalized renovation costs related to the redevelopment of the office tower; the Project also qualified for valuable tax benefits intended to spur new development in the surrounding area.
The Downtown Tucson market currently has only one upscale lifestyle hotel, while market growth has created a strong demand for upscale product within the hotel sector. Bolstered by local knowledge and industry expertise, the top-tier Sponsorship team recognized the gap within the market and identified the asset as a unique opportunity to create a transformative hotel in the city’s employment and social epicenter. GSP was able to identify an institutional-quality lender who not only understood the substantial value of the Project’s tax benefits in a high-growth market, but also the Sponsor’s ability to execute on the business plan.

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