THM Acquisition · Offer Structures
DoubleTree Galleria: Two Ways to Capitalize
Same asset, same business plan, same $16.66M PIP. The two offers differ on exactly two levers: the cap rate (which sets price) and who provides the financing. For the seller (lender / REIT).
| | Column A: Cash to Seller | Column B: Seller Bridge |
|---|
| Pricing |
| Valuation basis | As-is market | As-complete, seller-carried |
| Cap rate | 8.5% | 7.5% |
| Implied value (NOI $3,610,041 / cap) | $42.47M | $48.13M |
| Less PIP / CapEx | ($16.66M) | ($16.66M) |
| Purchase price | $25.81M | $31.47M |
| Financing |
| Source | 3rd-party senior | Seller note / bridge |
| Binding constraint | as-is DSCR 1.17x | interest-only to stabilization |
| THM equity in | heavy | minimal |
| Seller outcome |
| Cash at close | $25.81M, clean exit | partial down + note retained |
| Interest income | none | yes, over bridge term |
| Price to seller vs Column A | baseline | +$5.66M |
| vs auction alternative | beats 60-75% recovery | beats it by the most |
Stabilized coverage and refinance-out test
| Stabilized margin case | Stabilized NOI | Refi DSCR (amortizing) | Bridge DSCR (IO) |
|---|
| 38.7% (model forecast) | $7.55M | 2.45x | 3.16x |
| 32% (NRG actual) | $6.24M | 2.03x | 2.61x |
| 30% (conservative) | $5.85M | 1.90x | 2.45x |
The point of this section: the stabilized NOI assumption (38.7% margin) is aggressive, but the deal still refinances out at 1.90x even at a conservative 30% margin, and at 2.03x at NRG's proven 32%. So the margin debate drives the price you can justify (the as-complete value and the seller-bridge cap), not whether the debt covers. The bridge takeout is robust to the margin coming in light.