A-Rod Among New Breed of Lenders Selectively Looking to Finance Hotel Projects
Photo Credit: Lenders are once again opening up to hotel projects but on a case-by-case basis (pictured: the Newport Beach Marriott Hotel & Spa in Southern California). CBRE Hotels
Skift Take
Want to build a new resort by the beach or acquire a five-star hotel downtown in a major U.S. city? Lenders are listening. But if you want to break ground on a roadside motel in a secondary market, you may be waiting for the bank to return your calls for several years.
The hotel investment narrative since March is one of dried-up bank lending, and the only deals getting done are ones that were underway since well before the pandemic began.
But money appears to be trickling back into the hotel sector, including one fund with backing from retired baseball great Alex Rodriguez.
“It’s going to be selective,” said Richard Clarke, a senior analyst covering global leisure and hotels at Bernstein. “If the business case is very strong, then you have been able to get these projects approved.”
Hotel occupancy rates and revenue plummeted this year due to the pandemic and, while they began a summer recovery, are once again retreating due to rising case counts around the world. This volatility nixed deals in the planning stages where developers were beginning to seek construction loans. But it also threw a giant question mark around how to value an existing property, effective
