hotel lending
Alternative Financing to Help Close Hotel Deals
Emil Iskandar | June 12, 2024
Like other commercial real estate (CRE) sectors, the hospitality industry has seen a drop in deal volume. The very stubborn inflation level kept benchmark lending rates elevated for most of last year, and this trend is expected to continue this year. To make matters worse, lenders—particularly local and regional banks—are facing their own issues with maintaining sufficient liquidity to make loans, as well as managing CRE concentration and sub-performing loans in their books. The pool of active hospitality lenders is arguably much smaller today, and those who are still actively lending are very selective in adding new loans to their balanc...
Wall of U.S. Hotel Debt Maturities To Catalyze Transactions
JLL | May 28, 2024
With the amount of maturing debt in critical stress expected to decline over the next few years, the opportunity to invest in the dislocation is now $5.8 billion of U.S. hotel single-asset securitized loans, including CMBS and CRE CLOs are coming due for maturity in 2024. Despite the U.S. hotel industry demonstrating strong RevPAR performance, there are multiple headwinds that could impede the refinancing of these securitized loans and compel owners to transact instead. These headwinds include the lagging profitability of U.S. hotels, persistently high interest rates, and historically high costs of property insurance. As such, if the loom...
Hotel Cap Rates: Adjusting to a New Reality
Erich Baum | May 22, 2024
By Erich Baum A capitalization rate (“cap rate”) is a shorthand expression of a given investment’s return and represents the weighted average return to the debt and equity positions. As detailed in this article, hotel cap rates are higher than they’ve been in recent years and are unlikely to decline anytime soon. Component Parts A cap rate can be constructed using the “band-of-investment” technique, requiring assumptions as to both debt financing terms and the equity investor’s return requirement, measured by the dividend (cash on cash) rate. The following table identifies this technique using typical pre-pandemic inputs fo...
Avison Young – Ten Years of Performance
Avison Young | April 25, 2024
ATLANTA – April 25, 2024 – Avison Young Hospitality Group releases today its Ten Years of Performance presentation. Last 10 Years Sales Performance...
Sonnenblick-Eichner Company Arranges Strategic Joint Venture Equity Investment for Pacific City Lodging Portfolio, Pacific City, Oregon
Sonnenblick-Eichner Company | April 22, 2024
Los Angeles, CA – April 22, 2024 – Sonnenblick-Eichner Company has arranged a strategic joint venture equity investment into the ownership entity of the Pacific City Lodging Portfolio, located in Pacific City, Oregon. The Pacific City Lodging Portfolio is an irreplaceable collection of iconic oceanfront resort properties comprised of the Headlands Coastal Lodge & Spa, the Inn at Cape Kiwanda, Hart’s Camp, and the Cape Kiwanda RV Park. Noble House Hotels & Resorts of Kirkland, Washington provided the investment into the partnership. This investment from Noble House allowed the existing ownership an opportunity to realize equit...
Sonnenblick-Eichner Company Arranges $21,000,000 of First Mortgage Financing for Cotton Court, Lubbock, Texas
Sonnenblick-Eichner Company | September 12, 2023
Beverly Hills, California – September 12, 2023 – Sonnenblick-Eichner Company has arranged $21 million of fixed-rate, first mortgage financing for the Cotton Court hotel located in Lubbock, Texas. The five-year, fixed-rate loan is non-recourse and was funded by a Wall Street investment bank. The loan is interest-only for the entire term at an interest rate of 7.6%. A rate buydown was required by the lender to achieve this rate and proceeds. The 165-room upscale boutique hotel benefits from its excellent location in downtown Lubbock. It is one mile from both Texas Tech University, a campus with over 40,000 students, and Lubbock’s do...
HVS Webinar: Higher Interest Rates Are Here to Stay but the “Old Normal” Will Come Back
Russel Kett | July 7, 2023
By Russell Kett We were delighted to welcome 425 delegates to our webinar on The Status of Hotel Debt Finance on Wednesday 5 July, hosted by HVS in conjunction with Bird & Bird, AlixPartners and EP Business in Hospitality. Tim Barbrook of HVS Hodges Ward Elliott and James Salford of Bird & Bird led off with a detailed presentation, explaining how we have got to where we are now, focusing on the impact of inflation and its effect on interest rates, and predicting what the future holds. They commented that lenders are now tending to focus their support on budget / limited service and luxury hotels. Interest cover...
Sonnenblick-Eichner Company Arranges $50,000,000 of Construction Financing for the Lionsback Resort, Moab, Utah
Sonnenblick-Eichner Company | February 7, 2023
Beverly Hills, CA – February 7, 2023 – Sonnenblick-Eichner Company has arranged $50 million of construction financing for Phase I of the Lionsback Resort in Moab, Utah, a 175-acre development located adjacent to internationally renowned Canyonlands and Arches National Park in eastern Utah. Proceeds from this fixed rate, non-recourse construction loan will be used to complete the Phase I onsite infrastructure improvements and vertical construction of the initial 34 single family homes, as well as the horizontal infrastructure of Phase II. To be built over five phases, at build-out, the $350 million development will include 188 single-...
