Lodging Fund REIT III Secures $20M Credit Extension Through 2027

The updated agreement introduces a higher interest rate and expanded credit capacity to support the company's growth.

December 30, 2024

Lodging Fund REIT III Expands Financial Capacity

Lodging Fund REIT III, Inc. has announced a pivotal update to its financial arrangements, amending its existing revolving line of credit to provide enhanced flexibility. The credit line, which was initially launched in 2022 with a $5 million capacity, has now been extended to $20 million. Alongside this expansion, the maturity date has been pushed out to December 31, 2027, securing longer-term liquidity for the company.

This marks the fifth adjustment to the agreement, reflecting a steady increase in available funds over time. The latest modification also raises the annual interest rate to 17.5%, an increase designed to align with current market conditions. These adjustments position the company to better address financial and operational needs while capitalizing on investment opportunities in the competitive lodging industry.

Strategic Support for Operations

The credit facility is secured by 2 million unissued common limited partnership units of Lodging Fund's operating partnership. This measure provides a robust foundation for the company's financial strategy, ensuring sufficient capital to manage both current obligations and future growth initiatives. As of December 27, 2024, $14 million has been drawn from the expanded credit line, leaving $6 million in available capacity for future use.

Long-Term Planning in a Dynamic Market

Lodging Fund REIT III's proactive financial management highlights its commitment to sustaining operational stability while positioning for future expansion. The decision to extend the maturity date by three years offers a critical cushion for addressing medium- to long-term goals, including potential investments in hotel properties and enhancements to its existing portfolio.

As part of its strategy, the company continues to focus on leveraging financial resources to adapt to changing economic conditions. The higher interest rate reflects an acknowledgment of current lending environments, ensuring access to necessary funds without compromising fiscal responsibility.

With $14 million already utilized under the agreement, the remaining capacity underscores the organization's ability to respond to unforeseen opportunities or challenges in the lodging sector. The $20 million facility is a testament to Lodging Fund REIT III's dedication to maintaining liquidity and adaptability in a competitive industry.