LAS VEGAS —Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Debt & Equity Finance Group has arranged approximately $37 million in financing on behalf of The Siegel Group Nevada, Inc., a privately held real estate investment firm. The financing is part of a comprehensive debt restructure recently completed by The Siegel Group.
The Siegel Group, which operates 21 flexible-stay apartment communities in Las Vegas, NV, known as Siegel Suites, engaged a Mission Capital team led by Managing Director Jordan Ray on two assignments to assist in capitalizing and completing the last tranche of a $300 million debt restructuring by the Siegel Group.
While The Siegel Group owns and operates a sizable portfolio of properties throughout Nevada and California that include multifamily, retail, office, boutique hotel and hotel-casinos assets, the debt restructure was solely limited to Nevada assets that the company acquired before the downturn. Making the debt restructure more challenging was that a majority of the original lending institutions had either sold the loans to third-party investors or failed and had been taken over by the FDIC.
In the first transaction, Mission Capital arranged $26.9 million in financing collateralized by four Siegel Suites communities. Mission Capital located a CMBS lender, which provided 10-year, fixed-rate, non-recourse financing.
“We were able to excel in these transactions by carefully explaining to lenders the unique no-lease-required business model of the Siegel Group, highlighting Stephen Siegel’s operational experience and by demonstrating that the properties had strong financial performances in both good times and bad,” Ray said. “This stability is especially impressive in Las Vegas, which was one of the hardest hit markets in the country during the downturn.”
In the second transaction, Mission Capital accessed the Los Angeles office of an international commercial bank, which provided $9.98 million in first-mortgage financing for three Siegel Suites communities. The lender provided a 15-year term with a 30-year amortization and a 4-percent interest rate.
Regarding the consummation of completing the restructuring of over $300 million in loans caused by the global economic downturn, Siegel Group CEO Stephen Siegel stated, “it was an arduous and time-consuming process that took nearly three years to complete. We spent years cultivating relationships with lenders with whom we were trying to modify loans at the onset of the downturn. To suddenly have your lender fail and your file assigned to a new institution which has no personal history or insight to work from was quite challenging. However, each new loan officer saw first-hand my work-ethic, commitment to my properties and their collateral, and the extraordinary time, effort and money I committed to reaching a deal, and ultimately determined that a mutually acceptable resolution was in the best interests of all parties. I told each of the lenders that I was working with that I was going to use them as a reference once the economy improved.”
During the economic downturn, the impulse among many property owners was to drastically cut expenses across the board. However, Siegel adopted a more creative strategy that was focused on attracting and retaining new and existing tenants by creating innovative amenities that provided value to his customer base. In 2009, he implemented the successful and widely copied “Live Here Eat Free™” program, which aggressively cross-promoted the Siegel Suites brand with the company’s hospitality properties and enabled tenants to redeem rent coupons for free meals at Siegel-operated restaurants. This program was replaced in 2012 with Siegel Suites Rewards™, which enables tenants to earn points each time they pay rent that can be applied towards the purchase of thousands of items from an online catalog as well as free rent.
Siegel credits these programs, his strong brand recognition and a skilled management team with providing the competitive advantage and strong occupancy he was able to maintain throughout the economic crisis.
“While other commercial property owners were returning keys to their lenders and walking away from underwater assets, Siegel remained focused on ensuring that the approximately 1,000 people that depended upon and worked for him remained employed, and that there was no disruption to operations, particularly among his Siegel Suites-branded properties,” Ray said.
Part of these efforts included seizing on the opportunity created by the downturn. Even in the midst of his loan workout negotiations, Siegel continued to acquire deeply discounted properties throughout Las Vegas, seeing the value present and recognizing that an upturn in the market was on the horizon.
About Mission Capital Advisors
Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas, California and Mobile, AL. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $45 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets.
Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.missioncap.com.
About The Siegel Group Nevada, Inc.
The Siegel Group, a Commercial Real Estate Investment & Business Development Company founded by Stephen Siegel with offices located in Las Vegas, Nevada and Studio City, California, specializes in the acquisition, disposition and development of under-performing, value-added real estate and businesses with significant turn-around potential. The company’s extensive expertise in the areas of operations, management, finance, marketing, branding, leasing, renovation, design, entitlements, construction, and redevelopment enable The Siegel Group to elicit an operational turnaround on the assets it acquires. These assets include a variety of businesses and a commercial real estate portfolio comprised of multi-residential apartment complexes, flexible-stay, boutique resorts, hotel-casinos, retail, office, restaurant, bars, and nightclubs. For more information on The Siegel Group and its affiliates, visit the Company’s website at www.siegelcompanies.com.