Hotel Loan Performance: Threats of Competition and Overbuilding
Performance might take a slight hit, especially in places like New York where it looks like there’s a new hotel on every block as I walk around different neighborhoods, but I don’t think it’ll make much of an impact. The saving grace is that commercial real estate loans for hotel construction have been tightening up for the last 18 months and therefore only hotels in locations with a clear need and strong sponsorship are on the drawing board for future development. I think the commercial real estate news stories moving forward will be more about commercial real estate refinance stories rather than new builds.
– Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance
Click here to read about how competition and overbuilding could threaten hotel loan performance.