Lending for U.S. hotel construction is back, hoteliers say

TRD New York /
May.May 09, 2013 11:00 AM

Big-time hoteliers are seeing construction lending come back strong, but less-established developers are struggling because of the strict standards that banks still have in place, the Wall Street Journal reported.

Hotel construction is a risky venture for lenders, but Marty Collins of Gatehouse Capital Corp. told colleagues at a conference this week that Gatehouse and other hotel developers are seeing support in financing. A key factor for change in lending is the issuance of commercial mortgage-backed securities, which are expected to double this year to $80 billion to $100 billion, Trepp LLC told the newspaper.

Construction is surprisingly ramping up in full-service hotels, which feature restaurants and spas, said Alison Cumberland, senior vice president at Marriott.

Because to the lack of new hotel projects since the recession, figures are on par with 2007. Average occupancy is at 57.7 percent, while the average nightly rate is $108.31, according to Smith Travel Research data reported by the Journal.

Research firm Lodging Econometrics predicts the industry will inch up its room base by 1.1 percent this year and 1.4 percent the next. Last year’s growth rate was 0.9 percent, the Journal said. [WSJ]Mark Maurer

Related Articles

Alex Sapir and the NoMo Soho hotel at 9 Crosby Street (Credit: NoMo SoHo)

Sapir Corp.’s stock drops in Tel Aviv

181 Varick Street (Credit: Google Maps)

Claremont Companies buys Soho Marriott for $59M

Rendering of the Staybridge Suites at 38-59 11th Street

Long Island City hotel project moves forward with construction loan

Heritage Equity Partners’ Toby Moskovits, Benefit Street Partners real estate managing director Micah Goodman, and the Williamsburg Hotel at 96 Wythe Avenue (Credit: Google Maps)

Toby Moskovits’ Williamsburg Hotel is headed for receivership following $68M loan default

461 West 34th Street with Marx Development Group's David Marx (Credit: Google Maps)

David Marx lands $202M refi for Hudson Yards hotel

30 West 31st Street and 52 West 36th Street (Credit: Google Maps)

South Korean firm snaps up two Midtown hotels for $137M

Brookfield Property Group CEO Brian Kingston and 652 11th Avenue (Credit: Google Maps)

Brookfield drops $83M on Hell’s Kitchen hotel

Mensur Cekic, Hudson Yards’ director of residences

From private tutors to meditation sessions, inside NYC’s new amenities battle