A newfound interest in the hospitality industry is fueling growth in private equity firms across the U.S. This reflects the relatively conservative approach still in effect at many banks and major lending institutions, which provides openings for a savvy real estate private equity firm to supply capital for hotels and other hospitality businesses. Here are some of the most important reasons for the current resurgence in private equity investments in the hospitality industry.
A Wide Range of Investment Options
Along with top-end performers in the U.S. and around the world, private equity investors are also able to access opportunities in the low-budget hotel marketplace. This can allow a more measured approach to investments in this volatile sector of the real estate investment field. By opting for the appropriate level of risk and choosing their hotel lending investments wisely, investors can optimize their returns while maintaining a healthy portfolio of balanced risks.
Partnership Opportunities
One of the best options for a smaller private equity real estate firm is to partner with companies already in the hospitality investment business. This can provide a valuable buffer against downturns in this marketplace while ensuring that investors can participate fully in this side of the commercial real estate marketplace.
Increased Prospects for Profitability
Real estate private equity firm investors can also access increased opportunities for profit taking and, in some cases, added control over the direction of the hotels in which they invest. By expanding their real estate investment portfolio to include hotels, motels and long-term lodging providers, these investors can often boost their overall profitability while enjoying a more diversified array of investments.
Benefits for the Hospitality Industry
For hotels and businesses that offer lodgings for travelers, acquiring new streams of capital investment can allow for expansions, renovations and debt restructuring to ensure greater profitability for their ongoing operations. This could represent a win-win scenario for investors and for hotel owners and managers alike. Improved cash flow and access to necessary capital resources from a real estate private equity firm can help hotels compete more effectively in today’s diverse hospitality marketplace.
At Stonehill Strategic Capital, we specialize in providing lending solutions for hotels across the country. We work with large hotel corporations and chains as well as smaller enterprises with a personalized approach to the hospitality industry. We can restructure, recapitalize and reposition your company for maximum financial flexibility and increased power in the hotel world. Whether you need bridge loans, mezzanine loans or permanent hotel loans, we can create a lending solution that is just right for your needs. Give us a call today at 713-666-2544 to discuss your needs with our financial experts. We look forward to the opportunity to do business with you.