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Why the Real Estate Private Equity Firm Industry Is Focused on the Hospitality Industry

Courtyard-Grenta-LAA 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.

Underwriting Basics of Hotel Lending

westinFinding the right hotel lending solutions can boost your profitability in the competitive marketplace. Understanding the complex hotel underwriting process can be a good first step toward qualifying for the funding you need to expand or to refinance your hotel. Here are some key points to remember about your hotel financing options and the best ways to qualify for underwriting for your hotels and other commercial properties.

Flags and Franchises

Hotels with recognizable names are more likely to attract customers and achieve profitability than comparable properties not affiliated with a franchise. Known as flagged hotels, these franchise enterprises offer added assurances to your guests of consistent quality and reliable service. Your chances of achieving favorable terms for your hotel financing arrangements are greater as part of a well-known chain or national franchise. If your franchise agreement is up for renegotiation in the near future, you may be best served to extend your franchise agreement early or to discuss terms with your lender to determine the best course of action for refinancing your hotel.

Location

A desirable location can also help you qualify for hotel refinancing arrangements. Your underwriter will look at the real value of the property as well as its revenue-generating potential. This can significantly affect your ability to achieve refinancing on reasonable terms and could increase your opportunity for success in this complex process.

Historical Performance

Traditional hotel underwriters also look at the current and historical performance of the hotel to determine whether hotel lending options are a risk-appropriate choice for the lending company. In some cases, working with a real estate private equity firm can provide greater flexibility and added options for hotel owners. These investment companies can typically accept greater risk and may be more likely to approve your hotel refinancing application.

Equity

The amount of equity you have accrued may also play a role in the ease with which you can obtain underwriter approval for your hotel refinancing application. Providing your lender with complete documentation on the status of your current loan can ensure that your application receives the consideration it deserves.

At Stonehill, we specialize in providing creative lending solutions for the hospitality industry. We offer debt financing, refinancing, funds for acquisitions and for renovations and all your other hotel lending needs. Our extensive experience and flexibility make us an excellent choice for refinancing debt or accessing cash for needed renovations to your hotels. If you need permanent, mezzanine, bridge or preferred equity loans, give our team members a call today at 713-666-2544 to discuss your situation with us. We look forward to the opportunity to provide the financing your hospitality business requires.

Stonehill Projects Record Year in Transaction Activity

Stonehill hit a record high in the first quarter, closing approximately $190 million in hotel financing. That follows a strong 2015, in which the Atlanta-based direct lender executed on 23 transactions. With a substantial number of projects already in the pipeline, the company is actively funding acquisitions and recapitalizations for both stabilized and transitional assets with strong flags in secondary and tertiary markets.

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Stonehill Strategic Capital Ramps up Lending Program for 2014

ATLANTA – (BUSINESS WIRE) – Stonehill an affiliate of Peachtree Hotel Group focused on hotel financing, today announced that it has ramped up its lending platform and plans to deploy approximately $200 million, primarily in mezzanine and bridge loans for hotel assets and development over the next 12 months. The company targets the $1 million to $10 million loan range for mezzanine loans and $3 million to $20 million for bridge financing.

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