Motel 6 at 2995 Route 1 in Lawrenceville — Courtesy: Cronheim Hotel Capital
By Joshua Burd
The owner of a Motel 6 property in Lawrence Township has secured new financing for the asset, in a transaction arranged by Cronheim Hotel Capital.
The debt placement team, which represented the borrower in the transaction at 2995 Route 1, said a local bank provided the loan for an undisclosed amount. The brokers also noted that the financing was secured not by the cashflow of the 104-key motel, but by master-lease payments paid by the operator to the property owner.
Brandon Szwalbenest and Andrew Stewart of Cronheim Hotel Capital, an affiliate of Cronheim Mortgage, sourced the loan.
“This structure, a creation of financial engineering, fixed the landlord’s share of the cash flow generated by the property, allowing for additional resistance to the cyclicality of the hospitality market,” Cronheim wrote in a news release. “The Cronheim team worked tirelessly to ensure that potential lenders had a thorough understanding of the benefits of this relatively uncommon structure.”
Built in 1978, the hotel has been a mainstay on the heavily traveled Brunswick Pike for decades, the news release said. Its model as an affordable, flagged lodging option has made it more resilient to economic headwinds than most, while it has successfully surpassed pre-pandemic levels of operational efficiency.
The collateral also included the sixth location of PJ’s Pancake House, a thriving local restaurant chain that recently signed a long-term lease at the property, the news release said. The additional cashflow provided by PJ’s served to diversify the lender’s exposure beyond one asset class.
