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Hotels Regain Attention From Traditional Lenders

There is light at the end of the hotel tunnel as experts see some loosening in the debt capital markets.

By Natalie Dolce | Updated on March 03, 2010

[IMGCAP(1)]Broader recovery in the debt capital markets has begun to extend to hospitality assets, a segment of the commercial real estate market that seemed to be blacklisted by many lenders over the past 18 months. Prospects of resumed revenue growth appear to be bringing funding sources back around.

“Hotels are once again drawing the attention of the more traditional lending institutions, albeit more slowly than other asset classes,” says Jeffrey Davis, New York City-based executive vice president with Jones Lang LaSalle Inc. “As mortgage lending builds its reputation as a viable investment based on an improving risk/return profile, traditional lenders have re-entered the space in search of high-quality senior lending opportunities.”

Hotel consultant Sumner Baye, president and partner of International Hotel Network LLC, agrees that there is a little bit of light at the end of the hotel tunnel. Although it is great to think positively in the next few years, he says, there is still a ways to go.

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