NEW OFFERING
ASAP LGA LLC (“ASAP”) is raising an additional $20M equity, representing 40% of total $50M ownership equity for the LGA New York Marriott hotel (the “Hotel”). This is a rare opportunity to participate in an irreplaceable institutional-quality 443 rooms, full-service hotel investment opportunity. The LGA Marriott will forever be the leader in the room and occupancy rate compared with other hotels in the LGA airport market.
The purpose of this $20M additional equity is to reduce the debt from $110m to $90m. ASAP opens this opportunity for new investors to participate and share this very profitable stabilized operation and asset value appreciation during the high inflation period.
THE RARE OPPORTUNITY
- New investors’ bases are the same as the ASAP original cost valuation: Current capitalization is $30m equity + $110m debt with the new investors’ $20m equity, the new capitalization will be $50m equity + $90m debt, Keep the same of $140m capitalization.
- Discount to the appraisal value – the Hotel just appraised for $180m+. ASAP is willing to offer this round of investors at the $140m cost back in 2019.
- Proved Performances – The Hotel will have $12.8m EBITDA for the year ended 2023. During the Pandemic, the Hotel never closed and had $11.3m EBITDA in 2022, projected $16.4m EBITDA in year 5, when we exit this investment.
- The Hotel is refinancing as of now. ASAP anticipate the $110m debt will be around 10.5% interest with 3+1+1 terms. For the last three years, the Hotel was able to pay an average of 12% interest from its cash flow, which proven the Hotel operation are very strong, profitable, and healthy.
- New investors’ 5 years IRR projection is 23.9%, and 2.68x Equity Multiple. ASAP’s projection with its current $30m and $110 debt is 29.8% IRR and 3.3x EM. This calculation shows; $20m Equity is more expensive than Debt. ASAP is willing to offer to the new investors this rare opportunity, to share a successful Hotel investment in exchange for a lower leverage to gain lower cost of debt (9% vs. 10.5%) and much conservative Debt ratio – 50% LTV.
- Investors will receive 8% annual preferred distribution, payable quarterly.
INVESTMENT HIGHLIGHT
An Irreplaceable Location
The Hotel is located within a 5-minute walk to new Delta terminal, LGA via a bridge over Grand Central Parkway. The Property is within 2.5 miles from the USTA National Tennis Center, home to the U.S. Open, and Citi Field, where New York Mets plays, and 7.0 miles from Manhattan.
Permanent Demand Drivers
This Marriott’s strongest demand driver – LaGuardia Airport had spent an estimated $8 billion on renovation to span 2.7 million square feet with four terminals and 75 gates. Terminal A, B and C has completed, Terminal D Delta Hub should be completed by end of 2022, which within a 5-minute walk to Hotel. The passenger traffic will increase significantly in the future.
An Asset Should Be Kept For Long Time
This asset benefits from its location, approximates to the brand new LGA Airport, US Open Tennis, NY Mets Citi Field and Manhattan. We should be able to keep for long long time to enjoy its growing cash flow and to hedge the high inflation for next few years.
The Strength of Marriott Brand
The Hotel benefits significantly from its affiliation with Marriott International, the world’s largest hotel company with a rewards program boasting 54 million members and access to Marriott’s proprietary reservation system, MARSHA, generates approximately 115 million reservations annually.
Status as a Best-In-Class Newly-Renovated Hotel
Completed end of 2018, the Property underwent a $30 million full-scale renovation, which not only made the Marriott LaGuardia the most desirable airport hotel at LaGuardia, but also one of the most desirable hotels at any NY airport. The Marriott LaGuardia is the most updated asset in its competitive set and is bought with well-below replacement cost.
PROPERTY INTRODUCTION
As the only full-service Marriott in Queens, the Hotel offers the largest meeting space and highest room count within the borough. The 10 stories building features 443 guest rooms, a new F&B outlet – Ditmars Bar and Grill, 13,500 square feet of meeting spaces, fully equipped fitness center, M CLUB and shuttle service that connects the hotel to the LGA.
The Property benefits from LaGuardia Airport as a significant permanent demand driver, with the Airport experiencing over 30.1 million passengers in 2018. New airport is expecting increase more than 40% of its previous passenger capacity. Supported by both the growth of domestic and international visitation to New York City and the remodel of the asset’s number one demand driver in LaGuardia Airport itself, the Marriott LaGuardia is posed for continued future success with an established, yet growing, consumer base.
The Property is under Fee-Simple, Non-Union, Below Replacement Cost, Very Low Debt Leverage 61.5% , and Never Closed during the Pandemic, a deal rarely seen in New York City.
New investors take advantage at 7.5%, Cap Rate, $274,000 per key basis with 28.3% IRR for 5 years exit, which is a bargain at the current market condition.
Documents
A full Private Placement Memorandum (PPM) summarizing ASAP LGA LLC. is available upon request for a complete discussion regarding these and other aspects of this investment offering.
Available to Accredited Investors:
- View and print the offering PPM, Subscription Agreement, LLC Operating Agreement, Executive Summary, Investor OM and Term Sheet.
- View and print the Detailed Financial Information and Projections
- Access all of the important documents for this offering in one place