The Opportunity: Privatization of Army Lodging (PAL) was a $25 million mezzanine loan originated by Behringer Harvard Opportunity REIT II, Inc. (the “Company”) in August 2009 to help fund the redevelopment of lodging facilities located at 10 U.S. Army installations in nine states.
Result: Loan was paid in full, plus interest and an early payment fee, in August 2011. The $25 million principal loan balance, plus interest and additional fees and proceeds totaling $4.9 million for a total of $29.9 million was repaid to the Company in August 2011, generating a deal-level IRR of 20.9%.
Asset Type: Limited service hotels
Asset Size: 3,200 hotel rooms on 10 U.S. Army installations
Investment: Mezzanine loan originated in August 2009
Repayment: August 2011