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RTC Sequel May Be in Hotels' Future

NEW YORK CITY-Panelists at the Third Annual RealShare Hotel Investment Summit talked opportunity while mincing no words about the challenges facing hospitality.

By Paul Bubny | Updated on September 11, 2009

[IMGCAP(1)]NEW YORK CITY-A revival of the Resolution Trust Corp. concept may be what’s necessary to get the deals flowing again, said panelists Thursday at the Third Annual RealShare Hotel Investment Summit, which drew about 300 attendees. Panelist Richard Rudd, senior managing director at Allied Advisors, said during the morning’s Power Panel session that special servicers cannot keep up with the influx of distressed hotel assets and there will have to be “bulk sales” through an RTC-like vehicle.

His fellow Power Panelist, HEI Hotels & Resorts’ Roger Clark, recalled that during the last major downturn of the early 1990s, “you had an active market” thanks to the RTC. At the moment, he said, it’s anything but active.

The numbers bear out Clark’s description. In a “Lending, Development and Transaction Update” following the keynote address, SVP J.P. Ford of Lodging Econometrics said that single, portfolio and M&A hotel deals reached 1,660, 674 and 1,382, respectively, over a 12-month period at their peaks earlier this decade. Year to date in 2009, the respective figures for these types of transactions are 206, six and zero. Panelists cited declining RevPAR and the continued credit freeze as factors, along with the glacial rate at which distressed hospitality assets are reaching the market.

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