Given today’s strengthening economic environment and attractive operating fundamental trends, investors seeking premium yields are increasingly taking risks through value-added investments. Investors must be diligent evaluating lenders for these projects, and consider factors including: a firm’s experience within the hospitality sector, track record and understanding of adding value in hospitality transactions.
EXPERIENCE IN HOSPITALITY
Perhaps the most important consideration lies in the lender’s knowledge of, and experience in, the industry. Deal factors perceived as risk by generalist lenders may be viewed differently by those with deeper industry perspective. Lending on the unique combination of real estate investment and an operating business driven by daily rents is not “one size fits all.”