By Jared Schlosser, Head of Credit Originations and Commercial PACE, Peachtree Group
For much of the last cycle, financing a hotel was relatively straightforward. A developer could secure a traditional bank loan, raise the remaining equity, and move forward. An owner approaching maturity could reasonably expect refinancing to provide a path forward.
That playbook has changed. Capital is available today, but it is increasingly selective. Banks have returned to hospitality lending, private credit continues to expand, and performing hotels can attract multiple financing options. Yet higher interest rates, elevated construction costs, and a difficult equity-raising environment have made the capital structure itself a bigger part of the investment decision.
The result is a hotel financing market increasingly divided between deals that fit neatly into traditional lending parameters and those that require a more creative solution.
For hotels generating sufficient cash flow to service their debt comfortably, liquidity is relatively available. Banks, CMBS lenders, and private lenders are all competing for quality transactions. Regional banks in particular have become more active again, improving liquidity for smaller hotel loans and acquisitions.
