CanAm Enterprises is pleased to announce that it has secured full repayment of its $20 million loan to the City Center Allentown Project on behalf of its 40 EB-5 Program investors. The EB-5 loan financed the construction of a full-service Marriott Renaissance Hotel and Three City Center office building in downtown Allentown, Pennsylvania.
“With COVID creating unprecedented challenges for the hospitality sector, especially business hotel operators, we knew that our 40 investors in this project would be waiting and watching to see if the project would repay on time,” commented Tom Rosenfeld, President and CEO of CanAm Enterprises. “So many have made forbearance requests on their loan payments. Working closely with the borrower, we went out of our way to remind them that our EB-5 investors had done their part in offering very attractive financing to spur the economic development envisioned for Allentown, which has been very successful, creating jobs in the region over the past five years – and that they should do whatever they could to ensure the loan is repaid. We are thrilled that they ultimately were able to repay in full and on time.”
CanAm’s project was part of a 10-year master-planned redevelopment of downtown Allentown, Pennsylvania, which, to date, has included $600 million in investment and delivered an 11-building complex, providing office space for 5,000 new employees, 6,800 structured parking spaces. The project has successfully revitalized the area and forever enhanced the Allentown skyline. The City Center Allentown Project features Class A office buildings, a full-service Marriott Renaissance Hotel with convention space and which connects directly to the PPL Center sports arena. The project also includes luxury apartments, upscale retail space, loft style office space and parking aimed at positioning downtown Allentown as a regional center for business, culture and metropolitan living. The master plan focused on blending new and existing properties to create a walkable “live, work, play” complex within the Allentown core.
As with many projects, COVID created significant challenges and uncertainty related to the near-term performance of the project. The Marriot Renaissance in the City Center Allentown, a business hotel attached to the convention center, has been closed since stay-at-home orders were announced in mid-March. Like other commercial real estate landlords, City Center Allentown has also experienced uncertainty with its office tenant leases due to the shift to remote working for office workers. All of which occurred with a looming August deadline for the $20 million EB-5 loan.
CanAm worked diligently to help secure repayment for its investors in a timely manner. “Since early this year, we were in touch with the borrower to ensure the August repayment was on track. ” commented John Reid, Director of Project Development at CanAm Enterprises “When COVID hit, as with all of our investments, we were proactively in regular discussions with the sponsor to determine impacts and ensure our investment remained sound. We insisted on a timely repayment for our investors and are very pleased that JB Reilly was able to facilitate this repayment even during this challenging time in the capital markets. It’s a testament to the quality of his organization and speaks to their ability to meet important commitments such as this. ” added Reid.
Launched in 2011, CCIC is led by J.B. Reilly and an award-winning team of individuals whose experience spans lifestyle communities, garden apartments, urban spaces, and historic high-rises. With 1.8 million sq ft of development under its belt to date, CCIC continues to operate the City Center Allenton complex despite COVID headwinds. In July, CCIC announced that it is preleasing and accepting deposits for a 169-unit luxury building that is slated to open on schedule in October.
“Of course, no one could predict a pandemic would hit, and we understood that there might be some compromises. This is not the biggest EB-5 loan we’ve made, but we were especially watchful because it’s in the hospitality sector. The fact that they understood our concerns and that they repaid – there’s no better example to reiterate how important it is to work with a credible developer that has resources to capital even in times such as these,” said Rosenfeld. “This is once again a true testament to CanAm’s strategy of conservative investing and its fierce commitment to seeing its projects to completion to ensure that its EB-5 investments are reasonably safe, transparent and reliable,” Rosenfeld added.
As of August, CanAm have repaid 3,500 investor families a total of $1.75 billion from 45 EB-5 projects completed in the last decade. In total, CanAm has raised $3 billion from its international investor pool and invested that capital into 60 development projects across the U.S. The 60 projects have created over 90,000 jobs for American workers.