NEW YORK CITY-While money is tight and is likely to stay that way for a while, New York, unsurprisingly, is a tough market for lenders to predict. A top-tier city and a global financial center, New York also ranks as a major leisure destination. But while the events of September 11 delivered a devastating blow to an already hobbled economy, lenders have not yet cut off the purse strings, even for the tourism-driven hotel sector.

Peter Korpacz, director of the global strategic real estate research group at PricewaterhouseCoopers, tells that while lending “is going to mirror the expected performance trends for the various property types, hotels will be a little more difficult to fund.”

But according to Mark Gordon, a managing director at New York-based mortgage brokerage firm Sonnenblick-Goldman Co, the hotel market is already bouncing back. “There’s been a fundamental change in lender attitude,” Gordon tells “For the first 30 days after September 11, lenders were not doing much for upscale, full-service hotels,” Gordon says. “Over the past three weeks, however, we’ve seen a fairly significant change.” Lenders are “coming back to see how hotels can be financed creatively.”

For example, pricing has increased 50 to 75 basis points. “Over time, that will come down as more lenders get back in the market,” Gordon says. “Right now, however, there are few [hotel] lenders, so they’re able to price more aggressively.”

Korpacaz says that while most deals firmed up prior to September 11 are going forward, negotiations on deals still in the works have sent buyers back to the well looking for a better deal. Such “attempts to retrade” may delay financing but are unlikely to prevent it. However, lenders are “taking a hard look at unemployment and at existing leasing” when considering a mortgage. “They’re trying to bridge the gap of uncertainty from here to there, there being when the economy starts to perk up.”

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