Hotel Renovation Loan | $2.38MM Full-Gut Repositioning of Red Roof PLUS+
75 Keys • Construction-Driven Scope • Revenue Reset & ADR Lift
Hotel renovation loan overview
Hotel renovation loan structured to finance a true construction-level redevelopment of a severely distressed, functionally obsolete hospitality asset. Cornovus Capital underwrote and executed approximately $2.38MM of renovation financing, paired with approximately $450K of borrower equity, to fund a full-gut repositioning and rebrand into Red Roof PLUS+—resetting the asset’s physical condition, guest experience, and operating trajectory in a single execution.
This hotel renovation loan was not a cosmetic PIP or light CapEx execution. Pre-renovation performance reflected deep physical and operational deficiencies that constrained rate, occupancy, and guest perception. The financing was intentionally structured to support scope evolution, draw sequencing, and field-condition risk typical of full-gut renovations—exactly where conventional hospitality financing structures break down.
Construction ran from April through December and reached substantial completion in approximately 8 months—an aggressive schedule for a roof-and-windows, MEP-reset, full interior rebuild with ADA and lobby/kitchen construction.
Challenge
- Outdated and failing roof and exterior envelope
- Original or end-of-life windows and water intrusion risk
- Severely degraded interiors requiring complete demolition and rebuild
- Obsolete electrical infrastructure and panel systems
- Aged PTAC units and inefficient HVAC distribution
- Back-of-house systems in poor working condition, including laundry and mechanical
- Bathrooms and plumbing systems requiring full replacement and reconfiguration
- Non-compliant or insufficient ADA accommodations
- No viable lobby experience and no functional kitchen infrastructure
Solution
- $2.38MM hotel renovation loan proceeds
- $450K borrower equity supporting execution certainty and alignment
- Structure designed for draw timing, sequencing, and field-condition risk
- Scope accommodated roof, windows, MEP reset, ADA upgrades, and guest experience rebuild
- Repositioning to Red Roof PLUS+ to materially elevate rate ceiling and competitive set
A major execution advantage was that ownership acted as general contractor, eliminating third-party GC markup and compressing decision cycles—materially reducing schedule risk when paired with demonstrated operational depth.
- Complete roof replacement (tear-off and new system)
- All new windows across the property
- Full interior gut of guest rooms and corridors
- Floor leveling and substrate correction including second-floor decking work
- New drywall/green board where required
- All new guest bathrooms, fixtures, and finishes
- Plumbing replacement and reconfiguration as required
- Electrical panels replaced; new interior and exterior lighting systems
- New PTAC units across guest rooms
- Construction of five ADA-compliant guest rooms
- 2,500 SF lobby rebuild for a materially upgraded arrival experience
- Hotel kitchen buildout supporting upgraded service expectations
Results
- Annual revenue increased from approximately $340K to just under $1.3MM
- ADR performance consistently in the low-to-mid $90s, with weekends reaching the $110 range
- Schedule delivered in ~8 months (April–December), materially faster than typical 12–15 month timelines
- Compressed timeline reduced carry costs, interest expense, and time-to-revenue recovery
- Repositioning established a higher rate ceiling and more durable revenue profile
Explore additional financing outcomes in our Transaction Highlights archive .
Related capital programs
Explore additional commercial real estate and hospitality financing options: Bridge program, CMBS program, LifeCo program, Conventional financing, SBA 504 program, and SBA 7(a) program.
About Cornovus Capital
With over 70 years of combined experience, Cornovus Capital is a trusted financial partner specializing in business financing, commercial real estate lending, and hospitality funding solutions. We design customized capital strategies that help businesses acquire, expand, and optimize operations, ensuring long-term growth and financial stability across multiple market cycles.
Our expertise spans CMBS and LifeCo financing, private capital solutions, structured debt strategies, SBA 7(a) and 504 loans. By focusing on certainty of execution, disciplined underwriting, and closing assurance, we guide businesses and investors through complex capital markets environments, securing financing aligned with long-term ownership and investment objectives.
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