Since our last eNews campaign a few weeks ago, we have had a number of responses and many have asked us what to expect, when attempting to finance a hotel, especially in view of the Covid 19 impact.

Over the past 4 weeks we have talked a significant number of lenders, and while many are temporarily on the side-lines, the following bullet points were the key elements of discussion and were quite consistent. Here are the take-aways from our discussions:

• SBA support will play a major role in reviving economy and mid-market transactions.

• Underwriting will be much more stringent. Experience & equity will matter.

• Global cash flow of the sponsor will be closely examined.

• Debt service escrows and/or other hold backs might come into play.

• Lower LTVs and higher DCRs will be common.

• Income stabilization of the subject property will be a priority.

• Appraisals, for the short term, will be difficult and may contain a “Covid” (current) distressed valuation and a “stabilized” (future) value.

• Many loan closings, in the near term, will be based the property showing a distinct path to pre-Covid revenue levels.

• Proforma deals will more difficult and will be dependent on the balance sheet of the sponsor.

FEATURED PROPERTY

Best Western Pioneer Inn & Suites

NEW PROPERTIES

Leisure Real Estate Advisors, LLC is based in metro Kansas City and has a specialty concentration in the marketing and sale of hotels and provides exclusive representation to owners of hotel real estate. With over 75 years of collective hospitality experience and over $1.2 billion in sales, the company has become one of the premier hotel brokerage firms in the country and has been recognized by Hotel Business and Hotel Management magazines for its performance. It has also received the 2013, 2014, 2015 & 2017 Power Broker from CoStar. It has offices in Kansas City, Columbia, MO, Lincoln, NE and now, Sioux City, S. Dakota and an affiliated office in Wichita, KS. For more information about the company or to discuss the investment market in general, please click on the following link and call any team member: https://www.leisurerealestate.com/brand-wom/