$3.17 Million Loan Request for the

Refinance of the

Quality Inn of Morgantown, WV

Terms and Conditions

You are given access to this loan proposal memorandum because Scientific Capital has determined that you (LENDER) have indicated that you have interest in reviewing this loan request and the lending capacity in offering this loan. The information provided in this memorandum is confidential and may only be shared with LENDER’s internal staff and should not be shared with other lenders, brokers, vendors, and third parties unless authorized by Scientific Capital. LENDER is not authorized to pull credit from the borrowers unless the borrowers have signed LENDER’s authorization form.

This memorandum is prepared by Ramin Mostaan and any questions or comments should be directed to him at the following contact information:

Ramin Mostaan
Scientific Capital
949 477 5000 (Office)
949 302 8300 (Cell)
ramin@scicap.com

Transaction Overview

Purpose

To refinance the conventional loan held by Exchange Bank at higher rate of 8% fixed for five years into a conventional loan at reasonable market rate. The only motivation behind this refinance is the reduction of the interest rate and hence the debt service.

Project Strength

The sponsors are very experienced with a large hotel portfolio in Virginia, Maryland, and West Virginia. Their Hampton Inn & Suites of Blairsville, PA is only 89 miles away
Hotel has strong cashflow and is historically stable.
There is no PIP or renovations required. There have been large capital expenditures including 2022 new roof at $165K and new hotel sidings at $123K, and 2025 new carpets in all rooms at $32K for total of $320K

Project Challenges

With this transaction focused on refinancing with lower rate, the goal is to challenging task of finding rates in the low 6% range, possibly with Swap rates

Proposed Financing Structure

Proposed Collaterals

First Deed of Trust on the subject property and first lien on the security interest
Additional collateral pledged by the borrower: NONE
Additional guarantee pledged by the borrower’s affiliates: NONE

Sources of Repayment

Primary source of repayment: The rent paid by occupants of the subject hotel
Secondary source of repayment: Borrower’s personal excess cashflow and liquid assets
Tertiary source of repayment: Liquidation of the property anticipated to be a 75% loan to appraised value
Final source of repayment: Enforcement of guarantee

Hotel's Financials and Information

Specifications

Address: 225 Comfort Inn Dr, Morgantown, WV 26508
Franchise: Choice Hotels Quality Inn signed on 8/1/2017 with 20 year term with 13 years remaining
Rooms: 81
Year opened: 1986
Restaurant: Roosters Roost lease started 7/1/2023 expiring 6/30/2028 at $3,500/month until June 2025 and $4,000/month starting July 2025
Corridor: Interior
Number of buildings: 2 (Hotel and Roosters Roost restaurant are separate buildings)
Number of floors: 2
Building square feet: 37,476 sqft
Lot size: 4.11 acres

Location

The Rooster Roost restaurant is a separate building owned by the Quality Inn but leased out.

Photos

Demand Generators and Customer Segmentation

The Revenue by Market report of the hotel indicates the following customer segmentation:

Transient/Freeway/Leisure: 77%
Corporate: 21%
Others: 2%

Historical Cashflow

The cashflow below is based on 1065 tax return of the hotel from 2021 to 2023 and P&L of 2024. The DSCR is calculated based on a loan with 25 year amortization at the rate of 7%

STAR reports

Borrower Financials and Background

Borrowing Entity Structure

Borrowing entity is the Mahant Hospitality Morgantown LLC which has four members at 25% each where all four guarantee the loan. Rimal & Chinmay are the managers of the LLC.

Guarantor Financials

Hemal (Guarantor 25%) - Richmond, VA

Hemal lives in Glen Allen or Richmond which is an hour drive to King George and will be the operator and the managing member. He is an experienced hotelier who is operating a number of hotels. He is managing the following hotels:

2012: Super8 of Tappahannock, VA
2017: Quality inn of Morgantown, WV
2017: Quality Inn of Culpepper, VA
2019: Holiday Inn Express of Williamsburg, VA
2021: La Quinta of California, MD
2022: Comfort Inn & Suites, Ashland, VA
2022: Best Western of Kilmarnock, VA
2023: Holiday Inn Express of Forest, MS
2024: Holiday Inn Express of King George, VA
2025: Hampon Inn & Suites of Blairsville, PA

Hemal has excellent credit background.

Nikunj (Guarantor 25%) - Laurel, MD

Nikunj lives in Laurel Maryland. He is a software engineer and is partner with Hemal and Chinmay in a number of hotels. Nick operates a La Quinta hotel in Virginia. He has excellent credit history.

Rimal (Guarantor 25%) - Aldie, VA