GlobeSt.com: Can you name some lenders that are particularly bullish on hotels right now?

McKee: No, because as I said they are changing by the day. In fact I talked to one today that was always a strong national lender and I found out it is exiting not only the hotel market, but all real estate lending.

GlobeSt.com: Describe a typical deal getting done today.

McKee: For hotels right now, we are finding they mostly consist of smaller limited service type hotels [financed] by local regional banks. For the larger urban projects there could be funding from life companies or pension funds or overseas investment houses, but they are very picky, as they have limited balance sheets so they are looking for low-leverage deals.

GlobeSt.com: What else are lenders looking for besides low leverage?

McKee: More owners have to put up recourse – personal recourse – in deals.

GlobeSt.com: Are borrowers actually willing to sign on as a personal guarantor to those sized deals?

McKee: They don't have a choice. It's been a borrowers market for many years, and now the lenders are cherry picking the best transactions. Borrowers don't have many options now.

GlobeSt.com: Can any deal that might have difficulties attached to it get done?

McKee: Yes, but it still has to meet the new underwriting standards. We just closed a $9.2 million refinancing of a Hilton Garden Inn for Akhil Hospitality, a 99-key property near Jacksonville Naval Air Station. It was a unique challenge because it was a single property owner and had less than a year of operating history. But it was in a market with very good growth and it had brand certainty. It also helped that the operating performance it did have far exceeded the original projections.