{"id":6348,"date":"2022-04-11T19:22:54","date_gmt":"2022-04-11T19:22:54","guid":{"rendered":"https:\/\/libertysbf.alliancetek.net\/?p=6348"},"modified":"2022-04-11T19:22:55","modified_gmt":"2022-04-11T19:22:55","slug":"financing-hotels-post-covid","status":"publish","type":"post","link":"https:\/\/libertysbf.alliancetek.net\/index.php\/financing-hotels-post-covid\/","title":{"rendered":"How to Finance Hotels in the Post-COVID Era"},"content":{"rendered":"\n
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Originally published on Hotel Management<\/strong><\/a><\/em><\/p>\n\n\n\n

The COVID-19 pandemic has affected what kind of financing hoteliers can secure for their projects and how they can get that financing. During a recent webinar<\/a>, a pair of economic advisors shared their insights on what hotel owners should know about securing funds now, and going forward.<\/p>\n\n\n\n

Andrew Broad, principal at New York-based commercial real estate agency Avison Young, said that 2021 has been a \u201crecovery year,\u201d with leisure destinations across the country seeing a stronger recovery, which determines what kinds of assets are eligible for financing. \u201cIt’s what you are [and] where you are, and what’s available to you from a financing standpoint may depend upon that,\u201d he said. \u201cWe’ve seen anything from bridge financing, to assuming financing, to a couple deals that we’re closing this month that we actually went out and got [commercial mortgage-backed securities] fixed-rate money.\u201d The availability of capital has improved, he added, but where a borrower falls on that spectrum depends on what kind of asset the owner has, where it is located and what kind of money is coming in\u2014or not. <\/p>\n\n\n\n

Watch webinar on-demand<\/em><\/strong><\/a><\/p>\n\n\n\n

Special servicers like Avison Young are getting \u201cinundated,\u201d Broad said, because many of the support systems hotels have needed in recent years fall into the special service category, including CMBS loans. The Small Business Administration, he added, offered \u201ca lot of relief\u201d to borrowers: \u201cSo the things you would have to normally do in a situation of distress from a balance-sheet lender standpoint, they didn’t have to do.\u201d <\/p>\n\n\n\n

SBA Support<\/h2>\n\n\n\n

Alex Cohen, Liberty SBF CEO and co-founder, agreed with \u201cpretty much everything\u201d Broad had said, adding that the interest rate environment for floating rate liabilities has assisted in buoying the market through the downturn. The company helped secure Paycheck Protection Program loans for \u201chundreds\u201d of hotel owners across the country, he said, and a range of factors\u2014including a \u201cvery supportive regime\u201d from the Small Business Administration that allowed for payment deferments and a supportive balance sheet community also helped keep the industry afloat. \u201cThat being said, as we go into next year, we do expect to see some distress, particularly for assets that are not catering to the leisure market,\u201d Cohen said. Assets in central business districts and downtown areas may continue to struggle, driving \u201cdistressed low-end sales.\u201d On the other hand, he said, if interest rates do stay low and the lender community continues supporting hoteliers, the challenges could balance out. \u201cObviously, the market has underperformed, but in terms of distressed selling, that’s not something that we’ve seen to the extent that we saw in 2008 through 2010,\u201d he said. \u201cBut I do expect that we will start to see that coming into next year.\u201d<\/p>\n\n\n\n

Broad, meanwhile, predicts some challenges with property improvement plan and capital expenditure liabilities\u2014\u201ccoupled with the fact that a lot of folks in the industry accelerated depreciation.\u201d The overall scope of PIPs has expanded and supply chain and inflation have similarly impacted the cost of those projects, he added. \u201cSo looking forward, there probably is some distress there that just hasn’t been recognized yet, and I personally think it’s coming down the pipe.\u201d <\/p>\n\n\n\n

Assets that have recovered to pre-COVID revenue per available room are assets will be able to get financing going forward, either through conventional channels or from the SBA. \u201cWe’re also starting to see that the capital markets lenders like CMBS are starting to come back,\u201d he said. \u201cObviously, the amount of allocation that they’re providing to the hotel industry is smaller than it was pre-crisis but you know, we are starting to see liquidity come back into the market.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"

Originally published on Hotel Management The COVID-19 pandemic has affected what kind of financing hoteliers can secure for their projects and how they can get that financing. During a recent webinar, a pair of economic advisors shared their insights on what hotel owners should know about securing funds now, and going forward. Andrew Broad, principal at […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[13],"tags":[8],"class_list":["post-6348","post","type-post","status-publish","format-standard","hentry","category-sba-small-business-news","tag-hotels"],"_links":{"self":[{"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/posts\/6348","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/comments?post=6348"}],"version-history":[{"count":5,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/posts\/6348\/revisions"}],"predecessor-version":[{"id":6401,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/posts\/6348\/revisions\/6401"}],"wp:attachment":[{"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/media?parent=6348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/categories?post=6348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/libertysbf.alliancetek.net\/index.php\/wp-json\/wp\/v2\/tags?post=6348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}