"The market is very competitive and there is strong debt capital," he says. "First mortgages and mezzanine capital will likely fuel transactions.
"Clearly there has been a slowdown even here in New York," Gordon continues, "and investors have taken a step back, but we are not seeing significant adjustments in pricing of properties. I don't think that's appropriate. Also, we're not seeing significant changes in capitalization rates."
Gordon notes that his investment firm does not deal with "distressed property clients," and that the four- and five-star hotels he does primarily deal with are holding steady. "Most of our clients don't have to sell and if they do choose to do so and they don't get the asking price, then they refinance instead. " He notes that refinancing is becoming the big trend in the current environment.
He adds core assets of the hotel properties he encounters are doing well. "Our volume has remained very strong," he adds. "These assets are irreplaceable in areas with high barriers to entry. With more generic properties in more saturated markets, the story may be different. Here in New York City there's very little space for new hotel development, regardless of the economic climate, so it makes this market that much more attractive and successful."
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