Capital for an embattled industry: How hotel investors can tap into the debt market

Abstract

To lay the framework as to why the time is right for investors to look into the hotel market and why lenders may be receptive to such projects, this paper commences with a discussion of real estate cycles. By taking a closer look at where the hotel real estate cycle stands, the investment and lending community may gain a perspective on the near to mid-term return potential of the industry. The discussion will then turn to project-specific factors that shape up a potential investment to be perceived as a convincing deal by lenders, thereby opening the door to debt financing. This section will then be followed by an overview of current lending term trends. As a result of the global recession, September 11th, and ongoing declines in business travel, the industry has seen a rise in loan delinquencies, particularly for small properties in certain overbuilt markets. As such, the latter part of this paper will briefly review how lenders work with struggling borrowers to avoid foreclosure on quality properties which have recovery potential. Lastly, the paper will close with a discussion regarding key trends in hotel investment and financing. ABSTRACT FROM AUTHOR]; Copyright of Journal of Retail & Leisure Property is the property of Palgrave Macmillan Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)