GlobeSt.com: Who is investing in distressed hotel debt?What are the returns?
Nichols: Opportunity funds and hedge funds are taking theopportunity to invest in distressed hotel debt. These funds haverealized that even though the upside is capped, if the loan is paidat par, there is still a good risk-adjusted return with a low loanto value ratio. Ultimately, the investment can still be profitableso long as the debt is priced properly. And some hotel REITs arealso looking at purchasing distressed debt as a way to acquire theproperty secured by the debt.
GlobeSt.com: What is the future hold for the hospitalityindustry?
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