Cronheim Hotel Capital (CHC) has secured $40MM+ for the construction of Nittany Residence Club, a 70-unit, luxury condominium-hotel with ground-floor retail on the doorstep of Penn State’s main campus. The nonrecourse construction loan was placed with a national private lender.
This marks the first condominium-hotel to enter the submarket and the only of its kind in the borough of State College to allow unit owners to participate in an on-site hotel management program to generate nightly rental income when not in use. Prospective owners can rely on both capital appreciation and ancillary revenue streams. The project has achieved strong pre-sales given the deep undersupply of hotel keys in State College. Scholar Hotels will oversee hotel management and operations.
Project Details
Units will offer services such as 24/7 security, concierge, housekeeping, and fitness center access. NRC gives the Penn State University alumni network and investors a chance to own a piece of State College and have direct access to the public university.
David Turley, president of CHC, said, “This was an incredibly unique assignment and asset class, essentially fusing two asset types together—residential and hospitality. While there is proof of concept in this hybrid product at other universities, this was a trailblazing project and idea for State College that could be successfully architected by our sponsor team, a partnership of Penn State alumni with local hotel experience. We flexed our sponsor’s deep market expertise and thoughtfully positioned the Project to our capital relationships. After entertaining several options, we moved forward with a lender that truly believed in the Project and deal structure—we were very pleased with the execution. This deal demonstrates our ability to put together complex capital stacks and turn out of the box, hotel-adjacent ideas into realities.”
