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Putting Money Where Their Mouth Is

HREC is betting that the economy has hit bottom and is backing up its claim by sourcing hotel loans.

By Ryan Clark | Updated on May 21, 2010

DENVER-A peanut gallery of experts are debating whether or not the market has hit bottom or not, meanwhile Denver-based Hospitality Real Estate Counselors is leaping into the fray sourcing hotel loans. The hotel broker is partnering with an undisclosed opportunity fund to source hotel loans of $12 million to $35 million for select-service hotels and some full service assets. “The sweet spot will be Marriot, Hilton and Starwood branded hotels, primarily select service like Courtyard and Hilton Gardens,” explains Geoff Davis, president of HREC Investment Advisors. Their aim would strike these 125-room to 350-room brands with a non-recourse program for acquisitions, refinance and repositioning.

“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.”

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