RECAPITALIZATION FINANCING REQUEST
Hodges Ward Elliott, LLC (“HWE”) has been exclusively engaged by Suncroft Capital and Eagle Point Hotel Partners (the “Sponsors”), to arrange a floating-rate loan of approximately $13.7 million (the “Loan”) to finance the discounted payoff of existing debt and recapitalization of the Grand Adirondack Hotel, a 92-key Tribute Portfolio by Marriott located in Lake Placid, New York (the “Property” or “Hotel”).
Originally built in 1927 and fully re-imagined in 2022, the Grand Adirondack is a design-forward, upper-upscale hotel that blends historic charm with modern amenities. Positioned on Main Street with direct views of Mirror Lake, the Hotel benefits from exceptional walkability and proximity to key demand drivers including the Olympic Center, Whiteface Mountain, and a robust calendar of sporting and cultural events. With its boutique scale, brand affiliation, and location in a high-barrier-to-entry market, the asset is uniquely positioned to capture premium transient, group, and F&B revenue.
Loan proceeds, together with $5.4 million of equity from the Sponsors and $2.0 million of new equity from The Hampshire Companies, LLC, the existing joint venture partner, will be used to finance a discounted loan payoff and fund transaction costs, working capital, and initial reserves. The new Sponsorship is acquiring the asset at a 52% discount to the prior ownership’s cost basis, establishing a dramatically reduced ownership basis of $229K per key versus $479K previously. This recapitalization presents a rare opportunity to finance a fully renovated, Marriott-affiliated asset at a basis well below both replacement cost and historical transaction levels, offering a highly protected capital structure with meaningful upside potential.
Despite substantial capital investment, the Hotel has underperformed due to inconsistent management and missed revenue opportunities. Suncroft Capital and Eagle Point Hotel Partners will assume control and appoint Prestige Hospitality Group as the new third-party manager. Headquartered just two hours south of Lake Placid in Albany, NY, Prestige, a proven regional operator offers, will implement a targeted business plan focused on RevPAR growth, F&B repositioning, and group sales activation. Prestige offers a strong track record in the Lake Placid market and brings direct familiarity with the asset, having previously owned and operated the Property under its former branding as the Northwoods Hotel.
The plan targets full stabilization by year-end 2028, with a projected debt yield of 15% by Year 3* (2028). The $13.7 million loan request reflects a 31% LTC on the prior ownership group's total cost-basis, offering lenders an attractive basis in a Marriott-affiliated asset backed by institutional sponsorship, with near-term operational upside and a clear path to long-term value creation.
*Based on the loan request of $13.7 million
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Investment Highlights
Operational Reset Underway – Path to Stabilization by 2028
Although the Hotel reopened in August 2022 following a comprehensive redevelopment, its performance has been hampered by inconsistent management and missed revenue opportunities.
Upon closing in 2025, the new institutional Sponsor will assume control and implement a full operational reset, including the installation of Prestige Hospitality Group as the third-party operator. The focus will immediately shift toward activating group and event business, improving cost controls, and optimizing revenue strategy.
Premier Main Street Location in the Heart of Lake Placid + Gateway to Outdoor Recreation
The Grand Adirondack Hotel occupies an irreplaceable Main Street position overlooking Mirror Lake, placing it at the epicenter of Lake Placid’s pedestrian-friendly downtown district.
Guests enjoy direct walkability to over 30 restaurants, bars, breweries, and local shops, with immediate access to the area’s top year-round demand drivers, including hiking, skiing, fishing, biking, swimming, and the historic Olympic Sports Center, all within minutes.
Furthermore, the Hotel is uniquely positioned in Lake Placid, near the heart of the 6.1-million-acre Adirondack Park, the largest protected natural area in the continental United States, welcoming over 12 million visitors annually. This unparalleled location offers guests direct access to a diverse array of attractions, blending outdoor adventure, culture, and relaxation in one of New York’s most picturesque destinations.
EXCEPTIONALLY HIGH BARRIERS TO ENTRY WITH VIRTUALLY NO NEW SUPPLY
The Lake Placid hotel market is extremely well insulated from new competitive supply, protected by stringent development restrictions within the 6.1-million-acre Adirondack Park, one of the largest preserved natural areas in the United States and part of New York’s constitutionally protected Forest Preserve.
There are no new hotels currently planned or under construction, and only one new hotel has opened in the past decade, the 185-key Cambria Hotel, which delivered in January 2024. This was the first new hotel opening in over ten years, underscoring the rarity and regulatory difficulty of introducing new supply to the market.
This constrained development environment provides strong long-term protection for RevPAR and asset value.
Proven Pricing Power for Well-Located, High-Quality Assets
Lake Placid has demonstrated exceptional per-key pricing for hospitality assets in prime locations, with trades exceeding $500,000 per key historically limited to ultra-luxury properties. These premium valuations reflect the market’s deep demand for high-end leisure product and are underpinned by strong, consistent operating cash flows.
While the Grand Adirondack benefits from a comparable location and premium room product, it is being recapitalized at a substantially lower basis, offering lenders a rare opportunity to finance a fully renovated, brand-affiliated asset well below replacement cost, in a market with a proven ability to support top-tier valuations.
New Sponsor Acquiring at 52% Discount to Prior Ownership's Cost Basis & 32% Discount to Owner's Construction Costs
This recapitalization establishes a dramatically reduced ownership basis $229K per key vs. $479K under prior ownership offering a rare opportunity to finance a fully renovated, Marriott-affiliated asset at a cost well below both replacement and historical transaction levels. The favorable basis ensures a highly protected capital structure with significant upside potential..
Positioning the Grand Adirondack for Long-Term Success
The Sponsor has closely analyzed current operations at the property and will bring in Prestige Hospitality (who previously owned and operated the Property before selling to the current ownership) to manage. Together, they have outlined a comprehensive operational strategy designed to unlock asset value, drive revenue growth and achieve stabilization by year-end 2028.
Specifically, they have identified the following issues and opportunities at the Property under the existing management:
ISSUE: Poor performance in group sales and off-peak demand segments
Identified opportunities:
• Target small group and social event activity (i.e. weddings, corporate retreats, etc.) in the market
• Build relationships with travel agents and event planners
• Update campaigns and target digital marketing at major feeder markets (New York, Boston, Montreal)
• Collaborate with the many sport groups and organizations with active events in the market (ORDA, ROOST, DMO, Can-Am, etc.)
ISSUE: Missed revenue management opportunities Identified opportunities:
• Integrate Marriott RMS tools for demand-based pricing and improved forcasting, segmentation and inventory control
• Take advantage of Marriott corporate level agreements for transient and group related business
• Introduce length-of-stay pricing and channel mix optimization
Outdoor Recreation that Drives Demand Year Round
Originally established in the 18th century as an iron ore mining hub, Lake Placid has evolved into a renowned year-round tourism destination, and is renowned as the host of the Winter Olympics in 1932 and 1980. Lake Placid is one of New York’s premier getaways, offering visitors a diverse range of experiences—from world-class skiing in the winter and epic paddling adventures in the summer, to breathtaking fall foliage during autumn.
The Grand Adirondack Hotel is ideally situated in the Adirondack Mountains, in the northwestern corner of Essex County. This prime location provides easy access to the majestic Adirondack peaks and lakes, as well as a variety of sporting events and outdoor activities, making it an exceptional destination for all seasons.
Tourism On The Rise With New York State And Local Marketing Initiatives
Tourism in the Adirondacks continues to experience robust growth, driven by coordinated state and local marketing efforts. In 2023, visitor spending in Essex County, New York, reached an impressive $909.8 million, reflecting an 11.2% increase over the prior year. As the regional leader in visitation, Essex County accounted for 39% of total visitor spending in the Adirondacks. Notably, $477.9 million of this total was allocated to lodging and accommodations.
Lake Placid Making Headlines
