Why Lenders Pulled Back on Hospitality Finance

Porter: “Hospitality is an attractive asset class for CMBS because the relatively conservative LTV, DSCR and above-average margin metrics for hotel loans are accretive to a CMBS pool, but rating agencies will punish a CMBS pool with more than a 15% to 20% concentration in hotel.”

CARLSBAD, CA—The improvements in hotel financials in recent years led to substantial lending to the point where many lenders are overweight in that sector, so they put on the brakes purely from a balancing perspective, HREC Investment Advisors’ SVP, mortgage brokerage, Greg Porter tells GlobeSt.com. Porter, a commercial real estate veteran with more than 20 years of experience in lending, brokerage, consulting and valuation, recently joined the firm as a senior member of the capital-markets group, headquartered in HREC’s San Diego office here in Carlsbad. He is charged with growing the HREC mortgage-brokerage platform and reports to CEO Mike Cahill and capital-markets head Michael Armstrong.

We spoke with Porter about his goals in his new role and trends in hospitality financing.