Acquisition, construction, PIP and repositioning on flagged, soft brand, boutique and resort assets.
Hotels are declined by most generalist desks because the underwriting is operating-company underwriting, not real estate underwriting. The desks that write this paper read a STAR report, an ADR trend and a franchise agreement the way a bank reads a rent roll. Flagged franchise, soft brand, boutique and lifestyle, select and full service, extended stay, resort and condotel.
12 programs placed on this asset class, with the published size range on each. Everything here is business purpose, written to an entity, non-owner-occupied.
| Program | What it covers | Size |
|---|---|---|
| Hotel & Hospitality | Flagged franchise, soft brand, boutique and lifestyle, select and full service, extended stay, resort and condotel. Acquisition and bridge on an operating asset, ground-up construction, PIP and renovation, franchise conversion and reflagging, certificate of occupancy takeout before stabilization, partner buyout, and C-PACE behind a senior loan. | $2M to $150M+ |
| Hotel & Hospitality Bridge | Hotel acquisitions, flag changes, renovations, and repositioning. Specialized hospitality underwriting from lenders who know the space. | $1M to $100M+ |
| Hotel Ground-Up Construction | Select-service, limited-service, extended-stay and dual-flag new builds. Flag approval, franchise agreement, feasibility and STR comp set underwritten by desks that do only hotels. Construction minimums vary from a few million to forty, and some lenders gate on brand before reading the file. We know which is which. | $2M to $150M+ |
| PIP, Renovation & Reflagging | Property improvement plan capital, brand-mandated renovation, franchise conversion and reflagging, FF&E and working capital. Structured around the PIP scope and completion deadline rather than trailing performance. | $1M to $75M+ |
| Distressed & Auction Hospitality | Court-ordered sale, foreclosure auction, receivership, discounted payoff, and vacant or non-operating hotels with nothing to underwrite on a trailing basis. Acquisition plus renovation and FF&E to reopen. | $500K to $50M+ |
| Outdoor Hospitality & Marinas | Acquisition, expansion and ground-up for RV resorts, campgrounds, glamping and marinas, including dock and dry-stack work and seasonal revenue underwriting. | $1M to $25M |
| CO Takeout & Pre-Stabilization | The gap between certificate of occupancy and stabilized numbers, where the construction lender wants out and the perm lender wants twelve months of history. Lenders who will fund at CO on an unstabilized hotel with no trailing operating statements. | $1M to $100M+ |
| Construction Completion Loans | Projects 65 to 99 percent built that ran out of money: cost overruns, a construction lender that stopped funding, contractor liens, or a partner who walked. Proceeds finish the building and retire the existing construction loan. | $1M to $100M+ |
| Adaptive Reuse & Conversion | Office, hotel and institutional buildings converted to residential. Underwritten on the completed use rather than the current one. | $2M to $150M+ |
| Preferred Equity Rescue | Preferred equity placed behind senior debt to right-size impaired equity or credit positions. Designated rescue capital from dedicated funds with mandates to fill stack gaps in stalled multifamily, industrial, and hospitality projects. 15 to 18 percent yield range typical, structured against project economics. | $5M to $200M+ |
| Mezzanine Debt | Gap financing behind the senior loan. Second position capital for higher leverage deals when the first mortgage isn't enough. | $1M to $100M+ |
| Bank Exit & Non-Renewal Payoff | For owners whose bank will not renew, has called the note, or has agreed to a discounted payoff. Settlement payoffs, maturity takeouts, forbearance exits, and refinances where the existing lender wants out quickly. | $1M to $25M |
What hotel loans do you place?
Acquisition and bridge on an operating asset, ground-up construction, PIP and brand-mandated renovation, franchise conversion and reflagging, certificate of occupancy takeout before stabilization, partner buyout, distressed and auction hospitality, and C-PACE behind a senior loan. $500,000 to $150,000,000.
Will a lender finance a hotel before it is stabilized?
Yes. Certificate of occupancy takeout and lease-up bridge are written on hotels that have opened but have not yet reached stabilized occupancy, underwritten to the stabilized exit rather than to trailing performance.
Do you finance a flag change or PIP?
Yes. Property improvement plan capital, brand-mandated renovation, franchise conversion and reflagging, and FF&E, structured around the PIP scope and the completion deadline rather than trailing performance.
What leverage is available on hotel construction?
Generally to 65 percent of total project cost on ground-up hospitality, with higher all-in leverage reached by placing mezzanine or preferred behind the senior at the same closing. Interest reserve is funded at closing.
Do you finance hotels in secondary markets?
Yes, though market size is a real gate on construction. Some desks will not build a hotel in a market under roughly 50,000 population. Those that will are underwriting the demand generators rather than the population figure.
What does a hotel file need to be priced?
Property location and flag, keys, the loan amount requested, purchase price or current basis and payoff, trailing 12 occupancy, ADR and RevPAR, the STR report, any PIP scope and deadline, the franchise agreement status, and the exit.
An offering memorandum, budget or term sheet in hand is the fastest way to start. Anything you do not have yet can be left blank.