Investment Update
The property manager closed the financing for the 276 room Cleveland Clinic Holiday Inn on February 12, 2015 consisting of a construction loan from the Cleveland Clinic Foundation, key money from the Intercontinental Hotel Group (IHG), and equity funding. Total funding to date is $32,287,188 and is comprised of the total equity requirement of $6,893,546 with the balance of $25,393,642 funded through the construction loan. The property manager continues to pursue refinancing with the intention of closing by year-end under improved terms.
With the national spotlight of the Republican National Convention (RNC) scheduled for July 2016, the Cleveland hotel market continues to grow and occupancy for 2016 is expected to hit its peak. The property manager negotiated with the Republican National Committee for 86%, or 238 rooms, for a five-day period at almost double the standard rates.
The continued growth of Cleveland’s tourist appeal, Downtown’s retail market, and the residential and daily population, in conjunction with the growth of the Cleveland Clinic, will continue to draw visitors into the city long into the future.The Holiday Inn has a distinct advantage and the property manager remains confident they will achieve projected stabilized occupancy of 82% and initial Average Daily Room Rate of $130.
Design and Construction
Construction is on schedule with the exterior building substantially complete except for the exterior patios and landscaping. The mechanical, electrical and plumbing rough-ins and drywall framing are substantially complete on the guestroom floors. The pool finishes are underway and the installation of the kitchen equipment has begun and will be substantially complete and turned over to IHG by March 25, 2016 to begin pre-opening testing of the kitchen and restaurant areas. Interior finishes for both the guestrooms and public area have been completed and fully approved by IHG.
The project schedule has been accelerated with the completion of construction projected to be March 31, 2016 allowing the management company to take full possession of the property for staff training with opening of the Holiday Inn scheduled for April 26, 2016 approximately two weeks ahead of the original schedule.
