Lotus arranged $37 million of refinancing proceeds for the first-ever operating Virgin-branded hotel in the world.
The 26-story property sits in the heart of the loop of Chicago, a city regarded by many as a sub-par hospitality market, which was only exacerbated by the COVID-19 crisis. Lotus had to navigate around complex structural issues, with a third-party being involved in the ownership due to the purchasing of historical tax credits from the Property. Additionally, the Virgin group is still establishing itself in the hospitality market, with the Property being the only active Virgin hotel globally from 2015-2019 (the brand currently has 3 active hotels and 7 in the pipeline).
Lotus overcame the challenges of the Chicago market, and successfully closed the financing in early March – in the thick of the resulting market impact from the COVID-19 crisis. Lotus also achieved optimal structural solutions for the Client, negotiating an interest-only financing with no amortization, no ongoing covenants, and a four-year initial loan term with a one-year extension, allowing the sponsor flexibility to execute their business plan.