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How Lenders View Hotel Construction Now

IRVINE, CA—Just a few years ago, it was virtually impossible to find a hotel construction lender; that has completely changed, which is why so many more projects are getting built, Atlas’s Alan Reay tells GlobeSt.com.

Alan Reay Reay: “A lot of lenders have rushed back in this space and are very bullish on new hotels.”

IRVINE, CA—Just a few years ago, it was virtually impossible to find a hotel construction lender; that has completely changed, which is why so many more projects are getting built, Atlas Hospitality Group’s president Alan Reay tells GlobeSt.com. The firm recently released its 2016 Year-End California Hotel Development Survey, which showed that California is now experiencing a boom in new hotel supply as investors and developers continue to favor new hotel construction over purchasing existing older hotels. With the rapid increase in prices, we are now seeing that hotels in most markets are trading above replacement cost, which has made new development much more attractive to investors and lenders, according to the firm. We spoke with Reay about the main takeaways from the survey and how the lending community is viewing hotel development at this point in the cycle.

GlobeSt.com: What were the main takeaways from your hotel-development survey?

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Carrie Rossenfeld

Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.

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