For New York City hoteliers in search of financing, whether seasoned pros or first-timers, opportunities abound.
Hotel loans made up about $5.7 billion of multiborrower securitizations in the first three quarters of 2013 — more than double the $2.5 billion of hotel loans from the same period the previous year, according to a Cushman & Wakefield study cited by the New York Observer. The number of active lenders in the sector has exploded as well, increasing by about 20 percent in the last year.
“There’s just so much money being designated for New York City hospitality now,” Richard Born, who along with Ira Drukier owns and operates 25 hotels in New York, told the Observer. “Especially with all of the foreign sources coming in.”
Alternative and foreign lenders’ growing interest in hotel development, along with the return of many traditional regional and national U.S. lenders to the market, has spurred funding opportunities in New York City.
Hotel construction financing from banks and other lenders is picking up as many developers are pushed into the hotel space due to “intense competition to lend on other asset classes, such as Class A office buldings,” Jared Kelso, managing director of Cushman & Wakefield’s global hospitality group, told the Observer.
Jones Lang LaSalle, also hopping on the bandwagon, announced the expansion of its national Hotel Investment Banking Platform in mid-September.
More competition has come into secondary and tertiary markets as well, Matt Comfort, who co-heads Jones Lang LaSalle’s Hotel Investment platform, told the Observer. And those lenders, charging between 8 and 10 percent interest on hotel deals in 2009 when few others were lending, are now forced to charge between 4 and 5 percent. [NYO] — Julie Strickland