Hotel Assets Group Speaks On Current State of Hotel Debt
ATLANTA – April 22, 2013 – Hotel AG is seeing great traction in hotel debt both on the CMBS and whole loan side. Today the hotel debt market almost mirrors that of 2006 with a plethora of options available. Interest rates are at an all-time low, which is driving both the cost of capital and cap rate down. "Our biggest concern,'' stated H. Keith Thompson, principal of Hotel AG, "is there are implications of securitized debt that most hoteliers overlook. For example, in this current market cycle selling a hotel with CMBS debt is incredibly time consuming. Most loan assumptions, if they are approved, take five to six months to complete. From some investor’s viewpoint, a CMBS loan makes the hotel virtually unsellable and they have little interest in starting the process. The majority of transactions we are seeing are for unencumbered assets that the buyer can create a new capital stack.'' Andy Broad, Hotel AG senior partner, further commented, "The cost of acquisition debt has never been less expensive and capital seems to be readily available. A number of our clients have elected to transact now in order to free up equity with the intention of re-deploying into new assets whereby they too can take advantage of the current cost of debt in addition to increasing basis.''
AG Hotel AG is a national hotel brokerage firm headquartered in Atlanta, Georgia. The firm has closed 1 hotel transaction every 7 days for the past 30 months and 76 hotels within the last 12 months. Today the firm has almost 300 hotels on the market with a large percentage of the 300 under sale agreement. The firm specializes in select service and full service hotels within the US and works with CMBS lenders, whole loan banks, REITs, public companies, investment funds and private investors. The firm has 15 national brokers and 19 partners and can be found online at www.hotelassetsgroup.com.