LOS ANGELES-Canyon Capital Realty Advisors and its affiliates,including Canyon Johnson Urban Funds, have launched a drive tointensify their hotel investment activities under managing directorRichard Bosworth, who joined CCRA 18 months ago. Bosworth, who hasover 30 years of experience in the hospitality industry, says thatCanyon foresees a high level of activity in the sector for Canyonover the next 24-36 months in markets including New York, Chicago,Southern California and Washington, DC, as well as cities withinthe Pacific Northwest, the Northeast and the Southwest.

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Canyon is “actively evaluating hotel properties that are in needof recapitalization, especially in markets that enjoy a mix of roomdemand from both commercial and leisure travelers,” Bosworth says.The firm has established a focused hospitality team and is alreadyunderwriting numerous repositioning and reflagging opportunities,he adds.

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Canyon is a value-added capital provider, providing debt andequity on particularly complex transactions. The firm's trackrecord in hospitality spans a diverse portfolio that includes theWashington Hilton, Hotel 71 in Chicago, W Austin Hotel andResidences and the Cal Neva resort in Lake Tahoe.

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CCRA has not disclosed how much capital the firm plans to investin hotels, but managing partner Bobby Turner says that Canyon'splan is to expand its deployment of value-added debt and equitycapital in the hospitality sector and to leverage its presence inexisting markets throughout the US. He cites Bosworth's experiencein structuring investments, hotel operational management andspecial servicing.

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Since the mid-1990’s, Bosworth has been involved in originatingand structuring both hotel debt and equity investments, andmanaging nonperforming hotel and gaming assets. After the travelindustry downturn in 2001 and the subsequent illiquid capitalmarkets for hospitality finance, Bosworth assisted the fivetop-rated special servicers with their nonperforming hotel andcasino loans, participating in over 30 lender workouts.

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According to Bosworth, CCRA is seeing "many excellent hotelassets and repositioning opportunities that are currentlyover-leveraged." He adds, "Oftentimes, the underlying asset isperfectly capable of successfully performing in today’s economicclimate with the right capital structure. In some cases, weenvision infusing equity. In others, we see opportunities to issuedebt and assist borrowers in refinancing their existing loans."

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CCRA principal Jonathan Roth adds that Canyon believes marketfundamentals "are very strong for continued strategic hotelacquisitions and recapitalizations. We expect to be very active inmarkets across the country where there is a high volume ofprojected hotel loan defaults combined with improving supply/demandand RevPAR economics.”

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Canyon Capital Realty Advisors LLC and its affiliate CanyonCapital Advisors LLC have approximately $17 billion of capitalunder management. Its real estate activities focus on providingdebt and equity capital to real estate owners, operators,developers, corporations and entrepreneurs, while its investmentsinclude a mix of real estate property types including retail,entertainment, multifamily, industrial, office, hospitality, land,mobile home and mixed-use and mortgage loans secured by suchproperty types.

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