"The biggest problem we have in our industry right now is the availability of money," points out Sumner Baye, president of International Hotel Network. "We're not out of the credit squeeze yet. The lenders are not lending in the way whole hospitality industry would like."

The capital source, Davis remarks, has a fair amount of hospitality investments and is very familiar with the hotel industry. "They understand that there will be opportunities in the next two years to do acquisitions, renovations, repositioning plays and that's what the capital seeks to do, to refinance, take advantage of maturities, discount pay-offs, and good sponsors being able to reposition assets."

The loans are structured to be up to 85% of the project/asset value and will range in rates up to 10%, on either a fixed or floating rate basis. "In exchange for going to 85% LTV," Davis notes. "The pay rate is pretty reasonable, depending on the deal, average 8-10% interest only three- to five-year term, but its very much a participating mortgage, which means they'll end up taking 15% to 25% of the cash flow and the residual, because they're solving to higher yields. The lender will end up selling off the A notes of these loans and keeping the B and the mezz."