The hotel lending market is rebounding solidly amid the receding COVID-19 pandemic. Destination hotels, extended-stay hotels and other service-oriented hotels that remained busy during the pandemic are expected to qualify for new loans as cash flows rise sharply amid pent-up demand from travelers. The CMBS market is working hard to capture the financing needs for hotel owners.
ValueXpress offers 10-year fixed-rate CMBS loans on franchised and upscale independent hotels nationally. The loans are amortized based on a 25- or 30-year amortization schedule. Interest rates are in the low 4% area for full leverage loans and can be under 4% for larger ($10 million-plus) low leverage loans. Loan-to-Value is in the 65%-70% range. All CMBS conduit loans are non-recourse (no personal guarantees) and allow for unrestricted cash-out for refinances.
CMBS conduit loans have been very effective for hotel owners facing a franchise renewal Property Improvement Plan (PIP). When 10- and 15-year franchise licenses expire, franchisors are requiring substantial renovations and furniture replacement that can cost $10,000-$20,000 per room, or roughly $1-$2 million. Historically, many of our CMBS cash-out refinances have provided the funds for franchise renewal PIPs. CMBS refinancing has been very popular for our clients with Hampton Inn and Holiday Inn Express hotels.
ValueXpress has completed over 200 CMBS loans for its hotel clients. For a free, no-obligation CMBS conduit loan quote for your next hotel loan, please contact Michael Sneden (email@example.com) or Gary Unkel (firstname.lastname@example.org).