Procaccianti Hotel REIT Adds $1.75M to Hotel Indigo Loan, Pushes Maturity to 2028
The added capacity will pay for renovations at the Traverse City hotel, and the loan’s fixed 6.50% rate gives way to a Treasury-based rate after June 2027.
October 26, 2026
Procaccianti Hotel REIT has expanded and extended the mortgage on its Hotel Indigo in Traverse City, Michigan. The changes add $1.75 million of borrowing capacity to fund renovations and push the loan's initial maturity back one year to June 6, 2028.
The amendment, signed October 21 by the REIT's property-owning subsidiary and Beacon Bank & Trust, raises the loan's maximum principal from $15.6 million to $17.35 million. The full $15.6 million was outstanding when the changes took effect. The additional $1.75 million will be advanced once certain conditions are met and will fund a portion of capital expenditures and renovations at the hotel. Beacon Bank & Trust holds the loan as successor by merger to Berkshire Bank, which made it in June 2024.
New Rate and Payment Terms
The loan carries a fixed 6.50% rate through June 6, 2027, then a rate of 2.50% over the one-year constant-maturity Treasury yield for the rest of the initial term. Payments stay interest-only through June 6, 2028, and then convert to principal and interest on a 30-year amortization schedule. The REIT can prepay the loan in whole or in part on five days' written notice with no prepayment fee.
Two 12-month extension options could carry the maturity to June 6, 2030. Each requires:
- a debt service coverage ratio of at least 1.50 to 1, measured on amortizing debt service
- no default or event of default
- a $17,350 extension fee
In each extension term, the rate would again be 2.50% over the one-year Treasury yield, set on the term's first day and rounded to the nearest one-eighth of a percent. The borrower paid the bank a $10,000 modification fee, and the REIT reaffirmed its existing limited guaranty and environmental indemnity on the loan.
Third-Quarter Distributions
The board authorized third-quarter distributions on October 20 at the 7% annual accrual rate set in the company's charter, or $0.001917808 per share per day. Accrued distributions for the quarter ended September 30 totaled $677,851 on Class K shares and $256,731 on Class K-I shares. They are payable in cash on or about November 4 to holders of record on November 3. The board authorized first-quarter distributions in April.
Acting for the operating partnership, the board also authorized $22,606 in distributions, at the same 7% rate, on Class K operating partnership units. Those units are held by affiliated sellers of the REIT's Hilton Garden Inn property who are direct or indirect owners of sponsor Procaccianti Companies, Inc. and external advisor Procaccianti Hotel Advisors, LLC. Their payments are also due on or about November 4.
