5/20/2023 – Newport Beach, California –Schelin Uldricks & Co. announces the successful recapitalization of a 70-room beachfront hotel with extensive food and beverage operations in the quaint and historic resort destination of Cape May, New Jersey. Through our relationship with Emerson Equity LLC, Schelin Uldricks & Co., as exclusive capital markets professionals, arranged long-term senior mortgage financing for the property, sourced a family office equity partner, and consulted on the negotiation of a programmatic co-general partner investor for the acquisition of future hotels. In total, the company raised $27,300,000 of capital.
“Independent hotel operators often have a hard time tapping the institutional equity capital markets and sometimes need additional equity capital to complete a refinance,” said Schelin Uldricks & Co.’s Managing Partner Derek Uldricks. “Our equity sources range from institutional JV partners to high-net-worth individual investors. We have the ability to match the correct equity partners for the project depending on our client’s needs. In this case, we located a family office partner that has experience in hospitality assets and management, so it was a complimentary match for our client.”
The project was built in 1966 and is located at 1025 Ocean Avenue in Cape May, New Jersey and has unobstructed views of the Atlantic Ocean. The project sponsor also operates the popular Harry’s Bar and Grille at the site as well as a convenience store that caters to hotel guests as well as public beach goers. The current owners purchased the property in 2021 and took it through an internally designed property improvement plan to modernize the property. Through their high-quality management and execution, the operators were able to increase the total value of the property by approximately 85% during their short ownership period. The go-forward business plan includes a targeted marketing plan to increase wedding sales and renovate an existing Victorian style house adjacent to the hotel that will cater to larger groups or families looking to stay in Cape May and still have access to the hotel amenities.
“This project has an irreplaceable location in a high barrier to entry market.” Commented Ethan Schelin, Managing Partner of Schelin Uldricks & Co. “However, the financing assignment was still challenging on this project due to the high seasonality of the operations as well as the short length of ownership by our client. Despite the challenges, we were able to come to terms with a lender on long-term fixed rate non-recourse financing. The sponsor group has a strong track record of managing hotels like this and we are looking forward to watching them grow and helping them increase the room count in their portfolio through new acquisitions.”
About Schelin Uldricks & Co.
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