Hotel Owners Choose Refinancing Over Selling

Demand for hotel refinance capital is increasing. In some cases, hotel pricing is not meeting the expectation of owners, and as a result, many are choosing to hold rather than sell. For buyers, this has meant limited hotel investment opportunities on the market. For owners, this has meant renewing debt and extending the business plan on an asset.

“We are seeing very little product for sale on the market. Buyers are hungry for more, and sellers aren’t necessarily seeing the values that they would like to see when they are selling,” Cara Leonard, SVP at CBRE who recently joined the hotel capital markets team, tells GlobeSt.com. “As a result, the need for refinance capital has increased tremendously, which is positively impacting our business and the need for assistance in sourcing the appropriate refinance capital.”

Hotel owners aren’t alone. Lenders are also clamoring for hotel deals, and have been happy to fill the demand. “There is a tremendous amount of liquidity generally within the capital markets right now. Not every lender lends on hotels, but within the set of lenders that do, there is tremendous appetite,” says Leonard.