FARGO North Dakota—Legendary Capital is sponsoring the 175-room Holiday Inn El Paso Sunland Park (“HI-El Paso”) acquisition in a $9.7 million transaction. The deal used Legendary Capital’s Equity Preservation UPREIT (EPU) mechanism where HI-El Paso ownership contributed their property in exchange for a special class of Transition Partnership Units, which potentially preserves the contributor’s equity as the property restabilizes. The consideration also included the assumption of $7.9 million of the existing $8.4 million loan secured by the HI-El Paso and payment of $300,000 cash to the owner. The current professional management company, Elevation Hotel Management, LLC, will continue managing the property with NHS, LLC dba National Hospitality Services.
This is the second transaction Legendary Capital has sponsored in the past three months using its patent-pending EPU §721 UPREIT contribution structure, following the recently acquired Courtyard by Marriott in Aurora, Colorado.
“The Legendary Capital Equity Preservation UPREIT (EPU) construct is predicated on our attempt to transact in a difficult environment. Through the EPU structure, the contributor receives immediate equity in our affiliated operating partnership and time for their property to restabilize in this turbulent period. At the same time, their asset is contributed into our affiliated operating partnership.” says CEO Corey Maple. “We are thrilled to sponsor a second EPU closing and excited to bring the HI-El Paso property into our portfolio.”
As the second busiest international crossing in the United States, much of the traffic to El Paso is due to international trade. There is also a large military and government presence in the border town, with nearby Fort Bliss providing 47,000 military and civilian jobs. University of Texas El Paso is home to 25,000 students, and the University Medical Center and El Paso Children’s Hospital are two of the largest medical centers in the region. The Sunland Park Racetrack and Casino is a popular regional leisure destination.
“We love the location of the Holiday Inn El Paso,” says Dave Durell, Legendary Capital chief investment officer. “Traffic on I-10 gives the property tremendous visibility, and the area is full of the great demand drivers we look for.”