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Hotel Note Sales Should Hit By Summer

CHICAGO-A JLL Hotels report indicates that sales of large portfolios of hotel notes will be popular this year as investors are ready to put capital to work.

By Robert Carr | Updated on April 19, 2012

CHICAGO-In a new report, Jones Lang LaSalle Hotels says transactions involving large portfolios of hotel notes, along with increasing sales of bank real estate owned hotel properties, will take center stage in 2012. The collections, in excess of $150 million or collateralized by multiple select properties, will be in greater demand as investors look to put capital to work in search of higher returns, according to the company.

In 2009 to 2010, notes that were not good candidates for restructuring were put on the market by special servicers or lenders as the best way to dispose of a transaction in the absence of financial liquidity from borrowers. Mathew Comfort, EVP with JLL Hotels, tells GlobeSt.com that in many cases the servicers’ only choice was to liquidate via a note sale, which frequently happened at a deep discount due to uncertainty in operating performance and a lack of experienced note buyers.

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