Hotel specialists are responding to the trend toward debtopportunities tied to distressed properties by expanding theirservices to handle distressed assets. Besides working with lendersand other financial institutions in evaluating assets, they areworking with investors who are interested in acquiring loans onhotels that may be on the brink of foreclosure.

"As the market has shifted over the past 12 months, a lot of theinvestors we deal with are interested less in hard assets and morein hotel notes and mortgages," Geoff Davis, president of HRECInvestment Advisors in New York City, tells GlobeSt.com. Thoseinvestors seek stronger yields and safety from the capital stack ofperforming assets, while also looking at loan-to-own prospects fromthose properties facing default, he says.

HREC Investment Advisors, part of Denver-based Hospitality RealEstate Counselors, last month hired William Lee as SVP at its NewYork office to focus on note sales and equity and debtrecapitalizations. Lee has more than $8 billion of commercial realestate transactions to his credit, having previously worked withAnglo Irish Bank, the Carlton Group and HVS.