SAN DIEGO—Major hotel brands putting money behind an owner's choice to go with them is spurring deals and strengthening financing for those deals, Meridian Capital Group's managing director Seth Grossman tells GlobeSt.com. As we reported in June, Grossman and Meridian VP Sarah Kuebler negotiated a $100-million bridge loan for the refinance of a six-property hotel portfolio located in Florida, Texas, North Carolina and Minnesota, on behalf of a Los Angeles-based private-equity fund.

Grossman and Kuebler had also arranged the acquisition financing for the same portfolio in 2012. We spoke exclusively with Grossman about the transaction and trends he's noticing in hotel financing.

GlobeSt.com: What stands out for you the most about this refinancing transaction?

Grossman: What stands out for me is the diversity between lender bids for a deal like this. It was large enough, and because it was a pool, there was a tremendous amount of lender interest, but there was a huge crossover between types of lenders and the types of deals they needed. Some lenders needed flexibility; others cross with less flexibility but tighter pricing. There was a balance of both worlds needed. The exact same portfolio without major branding would have had a rougher time, but a strong sponsor and major brands that were diversified in major states generated lots of interest from lenders.

GlobeSt.com: What trends are you noticing with hotel-portfolio financing?

Grossman: It's not a new trend, but we're seeing more strength come based on the brand. Very strong boutique hotels can receive strong financing options, but if you're a Hilton it makes the case much stronger for lenders to get aggressive. The brands have customer-loyalty programs that are a strong driver. There's so much hospitality coming from business travel, so companies will pay the prices and aren't as dollar sensitive, and travelers will stay for the higher price because they're on a loyalty program.

In general, you're also seeing lenders really dig more into submarket than they had in the past. If they really believe in a market, they will underwrite down to more-aggressive debt yields. It could be sub-8% if there's the right upside story.

In addition, some brands are giving more key money, where a brand will actually give a check to the owner if they decide to go with that brand. When a lender sees a brand will give key money, they like it because others are affirming the asset. This leads to stronger deals with stronger feedback and lender interest.

GlobeSt.com: What else should our readers know about hotel acquisitions?

Grossman: We're seeing a lot of activity. A lot of hotels are receiving very aggressive bids, and financing has been following suit. Buyer and lender interest is increasing, so it's been a nice run. On the perm side, we're seeing lenders not afraid to cash out even if there's not cash to support it; this practice is not nearly as frowned-upon as it was in the past.