American Beech Hotel and Restaurant: Refinancing a Landmark with help from Pursuit
Typically, entrepreneurs begin with ideas for their businesses, develop their plans and then find locations that will enable them to achieve their visions. In the case of Brent Pelton, owner of American Beech Group in Greenport, NY, the location found him first.
After languishing on the market for more than a year, the historic property known as Stirling Square found its new owner in Brent, who saw its potential and envisioned its future as a multi-faceted boutique inn, retail and restaurant venue. Here’s the story of how he reimagined its underutilized space, put the right team in place, grew it into one of the North Fork’s most distinguished destinations and positioned it for future success with help from Pursuit, BNB Bank and an SBA 504 refinance loan.
A major real estate redevelopment
An attorney with a successful practice in Manhattan by day, Brent’s professional goals hadn’t included innkeeper and restaurateur – that is, until the day in 2014 when he closed on the purchase of Stirling Square, an historic assemblage of retail storefronts and apartments that had seen better days. Brent was a frequent visitor to Long Island’s North Fork region and was fond of the area. What he was less familiar with was the role of commercial property owner and, following that, hospitality proprietor.
“Stirling Square was my first commercial real estate venture,” Brent admits. Still, he was undaunted by the undertaking. With his partner, designer and entrepreneur Alex Vinash, to provide creative vision and marketing strategy, the property – which dates back to the 1800s – took on new life.
“Stirling Square is so charming and beautifully done, but everything needed to be updated,” Brent says. Knowing that there was an unmet need for high-end, boutique lodging in the North Fork, Brent hired a team of construction, management, design and marketing professionals, led by Alex. Today, American Beech Group has about 60 employees in season.
The team got to work renovating the former apartments and storage spaces into American Beech Hotel – a collection of fresh and inviting rooms, each with its own distinct decor and views over Stirling Square and Greenport. The restaurant of the same name was developed along with the hotel and several additional businesses – existing and new alike – filled out the redevelopment, which opened for business in 2015. Over time, all 15,000 square feet of the complex underwent mechanical and structural upgrades and aesthetic improvements.
An SBA 504 refinance to fuel growth
Brent took on significant debt with Stirling Square’s purchase price of just under $2 million and nearly $2 million in renovations and upgrades. Realizing that he could likely save substantially on interest rates through an SBA 504 refinance, his commercial banker at BNB Bank put him in touch with Pursuit.
“The overall experience was very positive,” says Brent. “With Pursuit and my bank partnering on the SBA 504 refinance, we substantially lowered the interest rate. The process was delayed a bit because of the pandemic and our loan just closed this summer, while we were in the midst of reopening. On the brighter side, that meant that we had working capital to help us get through the reopening challenges. Now, although our monthly payment is about the same, I have funds in-hand to help us through this and to take advantage of new opportunities that may arise, too.”
With the refinance, the interest rate on Brent’s financing was reduced from 5.625% to 3.40%. The refinance also provided more than $2 million in a cash out that Brent was able to put toward operating expenses for his properties.
Rebuilding now and looking past the pandemic
“With the businesses closing entirely in March and special events delayed for the foreseeable future, we initially had to lay people off and our revenue was negative in April,” Brent explains. “By June, things picked up and because so many people wanted a break from the metro New York area and from time at home, we actually had our best summer and early fall ever.”
Brent says that the capacity limitations have given the American Beech team time to refocus on the quality of their services and the experiences they provide at the hotel and restaurant, too.
“With limited indoor seating and prohibitions on use of the outside bar, we focused on creating intimate and beautiful outdoor spaces and people were thrilled with the results, from the food to the feeling of escape that they found in the American Beech environment,” Brent says. “We’re also catering to people coming to stay for the week, rather than the weekend crowd that was typical in the past. It has created new opportunities for connection with what we offer at American Beech, as well as other businesses in Stirling Square and throughout Greenport.”
“If there’s a silver lining,” he continues, “it’s that we’ve enjoyed a higher rate of repeat business because of the renewed focus on excellence.”
Looking back on the last handful of years, Brent has this to say about his first commercial real estate and hospitality venture. “It takes time to get to know your product – whether it’s owning a building or creating an inn or restaurant or anything else. But it’s so worth it when you get a great team together and build off of each other’s experiences, skills and creative energy and see the positive results you achieve together.”
Going further to support the community
Since acquiring Stirling Square and opening American Beech Hotel and Restaurant, Brent has expanded the American Beech Group to include another hotel, Aqua Beach.
In addition, Brent and his team have made a positive impact on the community by developing and leading high-profile fundraisers to benefit local charitable organizations – particularly Community Action for Southold Town, a non-profit that serves low-income North Fork residents. In recognition of his contributions, Brent was named the 2018 Person of the Year by northforker, the area’s community-focused news outlet.
Talk to Pursuit about ways we can help your business, too
Brent is forthcoming in his expression of appreciation for the support that he received from Pursuit. “Our business advisor from Pursuit, Josh, and the team really pushed to make this refinance happen,” he says. “There was so much financial uncertainty because of the pandemic and our businesses closing and without Pursuit’s help, all of this could have easily fallen apart.”
To learn more about how we can help you, too, contact us today.