Execs: Hotel deals pace slows as owners hold assets

October 5, 2018

Hotel and lending executives at the 2018 Lodging Conference spoke about the growing difficulty in finding good hotel deals in the U.S. and what kind of deals they expect in the future:
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PHOENIX—The hotel cycle continues on with 102 consecutive months of growth in revenue per available room and solid fundamentals, giving room for hoteliers to still make some deals.

A panel of hotel and lending executives during the “Let’s talk deals, M&A and development” general session on the second day of the 2018 Lodging Conference discussed what’s going on in the deals market and how the industry is handling this extended recovery.

Getting deals done
Blackstone has had a hard time finding good deals to buy this year, said Scott Trebilco, principal of real estate at Blackstone, as there’s not much inventory being marketed. The company has sold off a couple billion worth of properties in the hotel space across select service and full service, he said. It’s not the end of growth, he said, as it has different fund lives and needs to constantly recycle capital.

“I think this year we’ve bought $3 billion to $4 billion in hotels and we’re going to sell maybe $2 billion, so we’re sort of a net buyer, and I want to be a bigger net buyer if I’m doing my job right, but we just haven’t seen the opportunities or in some cases we’re being trumped by others who come in on top of us.”

There’s a lot of demand right now broadly for real estate and particularly in the hotel space, Trebilco said, because people view the world a bit like Blackstone does. While the industry is 102 months into its cycle, there’s nothing to suggest it’s even close to the end, he said. The industry is in an environment it hasn’t experienced before in terms of this type of recovery, he said.

Blackstone is taking the approach of until the data tells it something different, it will continue to do what it’s been doing, which is seeing growth and underwriting it until it stops. Twelve months ago, the industry had a more pessimistic view of the outlook, he said, but now deals are more expensive and financing is deep right now.

That’s why there’s new construction growth, said Chip Ohlsson, EVP and chief development officer at Wyndham Hotels & Resorts. Trying to find a good deal is like trying to untie a balloon knot, he said. Sixteen percent of Wyndham’s global pipeline is new construction, he said, domestic construction portfolio is up 22% this year because the deals are not out there.

“We would rather go out to the marketplace and build a new product,” he said.

Good deals are hard to find, said David Pepper, chief development officer at Choice Hotels International. The brokers will say a good select-service hotel that goes up for sale will get snapped up, he said. Choice transacts all of its existing assets, he said, and it is flat right now on its relicensing while last year was a record year, he said. It’s flat now because people are holding onto their assets, he said.

Primary, secondary and tertiary markets
Secondary and tertiary markets have been Wyndham’s bread and butter, Ohlsson said, so it has seen a proliferation of development in those markets.

“We love that space,” he said. “We think it is underrepresented in most cities.”

There’s so much opportunity in these markets if hoteliers can find a good partner in the cities and towns, he said. The number of travelers coming to the U.S. is expected to reach 600 million by 2025, he said, and while many of them will be headed to primary markets, there will be overflow to the secondary and tertiary markets because not everyone can afford to spend $600 a night. The secondary markets become a great opportunity for brands, he said.

InterContinental Hotels Group launched its Avid Hotels brand in 2017 with the intention of pushing it in secondary and tertiary markets, said Chris Drazba, VP of core brands and Mexico development at IHG, as the airport, secondary and tertiary markets are the sweet spots. However, some owners and franchisees have asked for them in primary markets, he said, so it has pursued a few deals in those markets.

“We didn’t think it was necessarily right down the center line for the brand, we’ve had some great opportunities in great cities as well,” he said.

Over the last 12 months, Blackstone has focused its investments in the top 50 markets, Trebilco said, and the exact market depends on the vehicle funding the investment. The fund has been investing in Hawaii, California, Arizona, parts of Florida and Texas, he said, and the thesis is a finite-life investment looking at the next five to seven years to achieve the most outsized growth relevant to what’s happening in the U.S.

In Hawaii, the company has invested $2 billion this year across four deals that are achieving 10% to 15% RevPAR growth consistently, he said. The company has been targeting domestic U.S. and Canadian travelers instead of international travelers, he said, and it has been catering a lot to the West Coast, where people working in technology and innovation have wanted to spend their money on traveling to Hawaii.

“The fundamentals there are exceptional, similar to California,” he said.

In another vehicle, Blackstone is focused on the markets with the greatest trends over a 20- to 30-year period, Trebilco said. For an example, Salt Lake City, Utah, and Reno, Nevada, have a lot of innovation and corporation relocation and expansion because they are great place to live with a low cost of living.

“We sort of look across the landscape and sort of have a view around the immediate-term, more seeing real time because we have the benefit of owning a lot of stuff and seeing a lot of deals, so we can see what is happening and use that to kind of feedback into our business thesis,” he said. “We’re also thinking about where is the wealth shifting, where do people want to live, where do people want to create jobs, where is innovation happening and what are the knowledge markets.”

Looking ahead
IHG had a record year for new signings in 2018, Drazba said, and the pathway to get to the total numbers unfolded in an interesting way. Along with the record signings, the company added a new brand and “is up to its eyeballs in renovations,” he said, which gives the company a chance to have its owners sharpen their properties.

Looking into 2019, IHG sees another good year coming into the fold, he said, adding that he expects it to look similar to 2018.

“We’re looking at similar levels in volume,” he said.

Next year should be another strong year, Trebilco said. Blackstone will look to find ways to put out more capital in 2019, he said. There are a lot of challenges now in supply, labor costs, alternative accommodations and pricing, he said, but demand is at record highs.

“For us, the challenge is finding deals and scale where we have that conviction and the ability to stand behind it and trying to find a way to backfill for the $5 billion that we missed out putting to work in the LaSalle deal,” he said. “It’s challenging because there’s just not that many big scale opportunities that exist.”

The average term of Access Point Financial’s loans is five years, said Jon Wright, chairman and CEO of Access Point, which is different than the amortization which goes up to 25 to 30 years. The average life of its loans and bridge loans over the last 20 years has been 20 to 22 months before it is refinanced out, he said, but that number jumped to 29 months recently.

He said that “indicates community bank buckets are getting full for exposure for hotels going into their fourth quarter.”

The company wants to be taken out around 20 to 21 months, he said, but the increasing average life shows community and local banks are slowing down. When seeking renovation loans, if bankers are saying they’re at capacity for hotels, he recommended they classify the loans as a commercial industrial (CMI) loans.

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Access Point Financial CEO trades Making Music for Making Deals

June 25, 2018

by Jena Tesse Fox | 

Jon Wright had planned on a career in music, but instead found his livelihood in financing hotels. As the founder and CEO of Atlanta-based Access Point Financial, Wright leads a team of industry veterans in hospitality finance, supporting mortgages, new developments and renovations.

Growing up with a love of music inspired by his father (who he describes as being like the protagonist from “Mr. Holland’s Opus”) and his brother Mark, a songwriter/producer and current president of Show Dog-Universal Music, Wright originally had planned to spend his life creating songs. After graduating from the University of Arkansas, Wright followed his brother to Nashville to gain experience in the music industry, but needed a day job to pay the bills. He began training at the Ford Motor program for a role in junior management in its asset-based lending group, and soon was working in the company’s corporate real estate and asset-backed securities division, financing the “contents” of real estate—“everything but the land and building,” he said. In this role, he developed a taste for the financing industry—and for meeting the heads of corporate finance departments within large institutional corporations.

After four years, he was invited to interview with Holiday Inn Worldwide in Memphis. “Kemmons Wilson, the founder of Holiday Inn, had pioneered an in-house finance company called General Innkeepers Acceptance Corporation,” Wright said. The franchise industry was becoming very competitive, and Wilson wanted to jumpstart his “dormant” company by offering financing for Holiday Inn franchisees. Wright moved to Memphis and took over as managing director at GIAC, originating loans for franchise owners, overseeing the company’s finance subsidiary and supporting franchisee growth through senior- and sub-debt origination and syndication. “The first generation of hoteliers were still running the companies,” Wright recalled of those late-’80s days. “They were in the process of passing down their operations, their ownership of hotels through their family members. I was able to meet the first generation of franchise owners.”

 By the late 1990s, General Motors was looking to gain a foothold in the hospitality sector, and recognized how Wright’s experience could help it grow. “After nearly 10 years with Holiday Inn, I started the asset-based finance group for General Motors,” he said. Over the next eight years, the GMAC Commercial Mortgage—Asset Backed Lending Division supported hospitality-related developments, either owned or serviced, to the tune of more than $4 billion. In 2005, he structured the group’s sale to an Atlanta-based bank consortium, renaming the division Specialty Finance Group.

When the financial crisis began, Wright’s team stopped originating loans. “We maintained our servicing function, so we were managing our book of $2 billion—which was eventually sold to Blackstone in 2011,” he said. After that transaction, Wright worked with Greenwich, Conn.-based private equity investment firm Stone Point Capital to launch Access Point Financial and jumpstart originations again once the economy began to improve in 2011.

Jon Wright, Access Point Financial
Jon Wright, founder and CEO of Access Point Financial
Photo credit: Access Point Financial

 

As a lender, said Wright, Access Point has a unique position in the hospitality hierarchy—neither owner or operator, but involved in developments and redevelopments. “We don’t compete with our borrowers,” he said. “You could imagine that if you’re wanting to borrow money from a bank for your hotel, you don’t want to have to look over your shoulder every day when you turn the lights on, wondering if something is happening with your loan.”

What keeps Access Point competitive over time, said Wright, is the company’s focus on what a property’s profits will be like after the opening or renovation—in some cases, years in advance. “We will look two years out at where the performance levels and trends will be in that time frame, and then we will lend against that loan-to-value, looking into the future,” he said. “And so although we might be a bit more expensive than banks in some transactions, we can advance more proceeds because we’re giving you credit to future cash flows post-renovation.”

Clicking With Clients

“Our reputation over the years has kept us in the game. The brands recognize us. They refer us [to owners] very freely and very confidently because we issue term sheets with quick turnaround times and then we followed through. We do what we say we will do, and we do it quickly and we do it efficiently. It also goes to the point of, treating all of the brands with equal respect whenever we finance brands or even boutique hotels that are unbranded—that pricing and structure is either credit-worthy or not and we won’t be reducing our pricing or extending the terms of the amortization just because we prefer one brand over the other. That’s not the case. We’re agnostic to branding.”

Logic in Logistics

“For existing assets, we pay heavy attention to loan-to-value. For new assets that are coming out of the ground, loan-to-cost is at the top of our list, and not so much loan-to-value, because there are no cash flows that have occurred yet to give us a sense of comfort on what the loan-to-value is of that asset. For new assets coming out of the ground—and sometimes assets that are trading hands—our typical loan is to assets and ownership groups that are investing in break-even (and sometimes south of break-even) cash flows because they intend to put new capital in, new equity, fresh powder into the hotel and upgrade it. Then we look for, like I said before, the pro forma of cash flow two years ahead of our closing of the loan, so that the operator is getting credit for taking risks, for instituting a renovation project and then reopening the asset. That’s when the larger lenders and the institutions come in and refinance us, and we’re able to regenerate our capital that way.”

 

Source: https://www.hotelmanagement.net/financing/how-access-point-financial-ceo-jon-wright-decides-what-hotel-projects-to-back

Not All Hotel Lending Is Created Equal- The right disaster-recovery financing can speed a return to normalcy

June 4, 2018

Help-wanted pleas can apply to many things after a hurricane or other natural disaster ravages a city. That includes “help wanted” in the form of financing assistance for hotels seeking to cope with the damages caused by such disasters.

Through creative loan structuring, commercial mortgage brokers can help lighten the burden of hotel developers and owner-operators who need to rehabilitate or totally rebuild their disaster-stricken properties. In such cases, mortgage brokers should first ask their hospitality clients about insurance proceeds that may be available to restore the properties.

Interim financing should be arranged if there’s a shortfall on the insurance side or when an owner wants to take the opportunity to upgrade the property beyond its pre-disaster condition. A lender will want to know that the projected net operating income the hotel will achieve after the renovation will be sufficient to justify a permanent loan to replace the interim loan used to finance the renovation work, says David Sonnenblick, co-founder and principal at real estate investment bank Sonnenblick-Eichner Co.

A mortgage broker should determine the property’s performance level prior to the hurricane or other natural disaster. Also, Sonnenblick adds, the broker needs to know how other hotels in the market were performing prior to the disaster.

Financing details

The owner of an Atlantic Beach hotel could not rebound from Hurricane Irene after it struck the North Carolina coast in 2011. A direct lender handled the refinancing for the property under a new owner. The arranged deal freed up proceeds for other needs as well, beyond the renovation and conversion capital.

The financial institution was able to structure bridge financing within 10 days of application. The hotel, under a new flag, reopened in 2013. With the resulting boost in revenue, the new owner was able to refinance the property at a lower interest rate and 37 percent greater leverage, according to Access Point Financial.

Sonnenblick points out that lenders doing these types of interim loans are often either commercial banks or private debt funds. Commercial banks, compared with private nonbanks, will normally require recourse and usually offer slightly better rates and a bit lower loan-to-cost (LTC) ratio — look for around 50 percent to 60 percent — on interim financing for renovating a damaged hotel property.

A little more expensive, private debt funds will offer recovery capital in the 6 percent to 8 percent rate range, depending on the property. They also will typically take a slightly higher place in the capital stack. Private debt funds may go as high as 70 percent, 75 percent and, in some cases, 80 percent on the LTC, with respect to the costs of fixing the damage as a result of a hurricane and repositioning the hotel in the market, according to Sonnenblick.

Mortgage brokers should understand how the capital stack is structured and also whether lenders will be willing to participate in deals in which they don’t have a priority position in the event of default, says Dharmesh Patel, executive managing director of hotels for Colliers International and the recent chair of Colliers’ national hospitality practice group for hotel-investment sales.

“One of the major trends in hotel development we see in this cycle is that the borrowing is more conservative and the developers are putting more equity into their deals,” Patel adds. “Current debt ratios are often 60 to 65 percent, compared with 75 percent or more in the last cycle, so mortgage brokers have less to work with and may need multiple lending sources to suit their clients’ needs.”

Braving the storm

The effects of a major hurricane on a city’s hospitality industry extend from property damage to lost jobs, canceled future bookings and more. Recovery capital in the form of interim loans can serve as a bridge over troubled financial waters for hotel owner-operators in storm-ravaged markets.

“ Mortgage brokers can help by having an open discussion with these borrowers about predatory lenders and their tactics. ”

“It’s one thing when you have to manage delinquent borrowers, but we’re talking about relieving the burden of good operators in bad, often very challenging situations,” says Jon Wright, chairman and CEO of Atlanta-based Access Point Financial, a hospitality-market direct lender. “As owner-operators, it’s obviously the bulk of their livelihood. In most [disaster] instances, it’s then the panic button.”

The financial costs for hotel operators and owners can be staggering in the wake of a major natural disaster. Hurricane Harvey, which this past August flooded extensive sections of Houston — the nation’s fifth-largest metro area — could ultimately entail total damages of between $70 billion and $190 billion. The latter estimate is equivalent to the combined toll of hurricanes Katrina and Sandy, and represents a 1 percent hit to the national economy.

In most instances, owner-operators have to play the waiting game as well — waiting on insurance proceeds and other reimbursements after such destructive, naturally occurring events make life and business anything but normal. Delayed-payment plans and other financial concessions from lenders can go a long way when hotels are picking up the pieces after a storm.

One direct lender in the hotel sector, for example, offers select borrowers affected by such natural disasters a financing plan that includes six to 12 months of no payments and 18 months of interest-only payments. Rates stay in the standard 7 percent to 9 percent range for loan amounts typically ranging between $50,000 and $15 million.

Borrower beware

In the aftermath of a devastating hurricane, hotel owner-operators with distressed properties may be tempted to jump at a seemingly easy financing offer. Mortgage brokers can help by having an open discussion with these borrowers about predatory lenders and their tactics, including the financial reward some lenders pay brokers for placing loans with inflated interest rates.

“If it’s too good to be true, it might well be,” Access Point’s Wright said. “Borrowers [and brokers] need to be on very high alert as to who they’re dealing with. It’s not uncommon to find out lenders are really injecting capital under false pretense with the objective of taking back the property or, at the very least, taking over management of the asset.”

Business-interruption insurance can be another critical source of assistance that can help property owners stay calm and avoid making bad financing decisions while a hotel is recovering, Sonnenblick says. This insurance can help pay for operations and debt service so owner-operators are protected, typically for 24 months of interruption.

With predatory lending always a factor in the market, especially in the wake of a major disaster, it’s imperative for mortgage brokers and hotel owner-operators to dive deep into a financial institution’s history before inking a deal. The interest rate should not be the sole litmus test for doing business with a particular lender, Wright adds.

 

Source: https://www.scotsmanguide.com/Commercial/Articles/2018/04/Not-All-Hotel-Lending-Is-Created-Equal/

Access Point Financial Aims for $600Mln of Hotel Loan Originations This Year

June 4, 2018

Wednesday, 02 May 2018

Commercial Real Estate Direct Staff Report

Access Point Financial Inc., a hotel lending specialist whose principals have completed more than $7.5 billion of loans, expects to fund $600 million of mortgages this year.

The Atlanta company is led by Jon S. Wright, chairman and chief executive, who had founded it seven years ago. It focuses on providing small- to middle-market loans against properties that generally are undergoing renovations to make them eligible for a national brand and franchise.

It funds bridge and construction loans, and writes mortgages to fund capital expenditures and furniture, fixtures and equipment. Hotel owners also often turn to it to fund renovations designed to allow a property to get a national brand and franchise agreement.

It will write loans from $50,000 to $90 million. But its sweet spot is anywhere from $10 million to $15 million.

Its average loan has a balance of $3 million. Wright said his team will write anywhere from 200 to 250 loans this year. Its loans typically are structured with a term of three years, with possible extensions, and require a fee of 1 to 2 percent on origination and pay off. Coupons range from 7 percent to 12 percent, depending on where in the capital stack it’s playing, the value of collateral and types of guarantees.

Wright noted that it had provided…

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Source: https://www.crenews.com/top_stories_-_free/top_stories_subscriber/access-point-financial-aims-for-$600mln-of-hotel-loan-originations-this-year.html

Atlanta-based Access Point Financial Provides Quick Recovery Capital to Affected Properties in Disaster-Stricken Areas

May 9, 2018

Brian A. Lee

Friday, April 13th, 2018

‘Always look for the helpers’ was a mother’s comforting advice to her son when disaster struck. Hotel owner-operators can now do the same with a financial friend and its quick and customized recovery capital program.

“We find ways to lighten the burden of hotel developers and owner-operators who need to reestablish their assets, whether a complete rebuild or minor rehabilitation, and get back in the marketplace as soon as possible,” said Jon Wright, chairman and CEO of Atlanta-based Access Point Financial, Inc. “We commit to creative loan structuring for these folks so they don’t have undue burdens above and beyond what they’ve already incurred.”

Fast, good and economical: The business world says one can only pick two out of the three, but Wright, a more than 25-year hotel lending veteran who has successfully navigated the savings and loan crisis, Great Recession and other downturns, is here to right that rule. For nearly three decades, Access Point Financial has put expertise before expediency and partnership before profit in the middle market hotel lending space.

APF offers to affected parties six to 12 months of no payments and 18 months of interest-only payments — rates stay in the standard 7 to 9 percent range — for loans typically ranging between $50,000 and $15 million (the lender’s normal operating range is $250,000 to $25 million). The recovery capital program has been especially well-received by select-service assets in tertiary markets. APF expects to furnish $100 million in recovery capital proceeds within six to eight months.

“We’re offering this type of program because it’s economically feasible for us with our cost of capital and our ability to delay payments,” said the man who founded the Asset Backed Lending Group for GMAC Commercial Mortgage and managed the hospitality industry’s first captive finance division for InterContinental Hotels Group. “We have the scale of operation and the resume to conduct this type of business, as well as very, very close relationships with many of primary and long-term players in the hospitality industry over the last 30 years. They are family to us. We’re able to assist with granular attentiveness so they can get back to the macro operations of their hotels.”

Harvey, Irma & Wildfires — Oh My!

Houston, we have a problem, and Access Point Financial has a solution. The effects of Hurricane Harvey on Houston’s hospitality industry extend from property damage to lost jobs, canceled future bookings and more. Like a bridge over troubled waters comes welcome financial relief for hotel owner-operators from hurricane-ravaged Texas and Florida to wherever the next natural disaster may occur.

“When these storms come in – fires, storms, whatever act of God – we’ve always been in place to provide customized financing solutions, to provide loan modifications where they are needed,” said Wright. “It’s one thing when you have to manage delinquent borrowers, but again we’re talking about relieving the burden of good operators in bad, often very challenging situations.”

The numbers are staggering, that is if a hotel owner has time to look up from his or her own personal house of pain. Hurricane Harvey, which flooded extensive sections of the nation’s fifth largest MSA in August, could ultimately cost between $70 billion and $190 billion, the latter estimate equivalent to the combined toll of Hurricanes Katrina and Sandy and representing a 1 percent hit on the national economy.

Delayed payments and other financial concessions can go a long way when hotels are picking up the pieces after a storm. In most instances, owner-operators are having to play the waiting game as well – waiting on insurance proceeds and other reimbursements after such destructive, naturally occurring events make life and business anything but normal.

Wright said that despite many hotel owner-operators having very well-defined disaster recovery programs, covering both their general operations and information technology platforms, a big storm still presents major challenges, especially a one in a thousand-year cataclysm like Hurricane Harvey.

“As owner-operators, it’s obviously the bulk of their livelihood,” Wright said. “In most [disaster] instances, it’s then the panic button.”

Based on conversations and interviews with clients and their support network, including insurance companies, APF provides a delayed payment program of 12 to 18 months and/or interest-only options to help alleviate the major concerns about getting back to business and reviving their asset performance. With so much to worry about, from their personal lives to their business assets, owner-operators can breathe easier at the end of the month through the period of time required to achieve reconciliation with their insurance claims and other reimbursements.

“On occasion, the loan will not represent the requested return on equity for us per se,” Wright said. “We target a minimum ROE just like a hotel developer does. In these specific cases though, we’ve been willing to forgo the typical policy we have internally for goodwill and demonstrating our community involvement and ability to act charitably where we can.”

In these types of situations, APF will bypass its ROE modeling in favor of longer-term scenarios that take into account relationships. Without the people that are so adversely affected – from owners to general managers down to housekeeping and all who support a hotel’s different revenue streams – nothing would be possible anyway.

“That’s where we feel like we can add value in a charitable sense,” Wright said. “We certainly do not go broke in conducting this business, but I can say that we are definitely not in profit mode when we’re making these loans. Nothing is more deeply gratifying as that act of goodwill.”

Returns: Property, People & Investment

Access Point Financial’s track record of timely support and relationship-building goes a long way back, through good times and bad. After Hurricane Irene struck the North Carolina coast in 2011, the damaged former Sheraton in Atlantic Beach was left in a liquidity lurch. Despite making the repairs necessary to reopen, the owner ultimately could not survive the financial hit of extended closure as subsequent occupancy rates proved insufficient to avoid foreclosure with the original lender.

The new owner paid all cash for the nine-story property with plans to renovate the hotel and convert it to a full-service, 200-room DoubleTree by Hilton. Access Point Financial not only spearheaded the refinancing so the owner could redeploy rehab capital to other needs, it also provided the capital for the renovation and conversion.

Within 10 days of application, the direct lender was able to structure bridge financing to facilitate cash flow. The DoubleTree by Hilton Hotel Atlantic Beach Oceanfront reopened in 2013 with an extensive array of amenities, and the owner was able to refinance the property at a lower interest rate at loan proceeds 37 percent higher because of the resulting enhanced revenue performance.

Beware & Be Good

In high-stress situations similar to the aftermath of a hurricane, hotel owner-operators may be susceptible to predatory lenders. With so many challenges surrounding the asset’s recovery, it might be tempting to jump at a seemingly easy financing offer. Wright says beware.

“Borrowers need to be on very high alert as to who they’re dealing with, who they’re borrowing money from,” he added. “It is not at all uncommon for lenders to fly their banner and gladly take loan applications. However, it’s also not uncommon to find out they’re really injecting capital under false pretense with the objective of taking back the property or at the very least taking over management of the asset.”

Proper borrower due diligence on lenders will highlight an industry veteran like APF that has made approximately $7 billion of loans with no more than 1 percent in past-due delinquencies. It should also reveal the alternative.

“If it’s too good to be true, it might well be,” Wright said. “Comparing a lender’s rate is not always the bellwether for doing business with somebody. Dive deep into their history and their track record. There’s more predatory behavior out there, especially since the recovery.”

That means a lot more when it comes from a company committed to relationships. Every lender can model their business via commodity and overall portfolio ROE, but few focus on community commitment like APF, as proven by its long-term charitable commitments, seasonal payment offerings and now its recovery capital program. “Let’s rebuild together” is more than just a tagline for the hotel lender and partner.

Source: http://metroatlantaceo.com/news/2018/04/atlanta-based-access-point-financial-provides-quick-recovery-capital-affected-properties-disaster-stricken-areas/

S.B. Yen gets $90M construction loan for South Loop hotel project

May 7, 2018

A South Loop hotel project that’s been in the works for more than two years just got a $90 million shot in the arm.

Hinsdale-based S.B. Yen Management Group received a construction loan from Access Point Financial, according to Cook County records.

Plans for the two-tower hotel development at 1101 South Wabash Avenue call for a total of 281 hotel rooms. The project would also include about 3,500 square-feet of ground-floor retail, as Curbed has reported.

Work on the project began in 2017 with the demolition of a parking garage that had been on the property.

The site will be developed as-of-right and won’t need any special zoning changes.

The South Loop is in the midst of a development boom that includes high-profile projects like the 76-story, 792-unit One Grant Park; Essex on the Park, a 56-story, 479-unit rental tower; and a 74-story, 323-unit condo tower known as 1000M at 1000 South Michigan Avenue.

source: https://therealdeal.com/chicago/2018/04/23/s-b-yen-gets-90m-construction-loan-for-south-loop-hotel-project/

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Access Point Financial Aims for $600Mln of Hotel Loan Originations This Year

June 4, 2018

Wednesday, 02 May 2018

Commercial Real Estate Direct Staff Report

Access Point Financial Inc., a hotel lending specialist whose principals have completed more than $7.5 billion of loans, expects to fund $600 million of mortgages this year.

The Atlanta company is led by Jon S. Wright, chairman and chief executive, who had founded it seven years ago. It focuses on providing small- to middle-market loans against properties that generally are undergoing renovations to make them eligible for a national brand and franchise.

It funds bridge and construction loans, and writes mortgages to fund capital expenditures and furniture, fixtures and equipment. Hotel owners also often turn to it to fund renovations designed to allow a property to get a national brand and franchise agreement.

It will write loans from $50,000 to $90 million. But its sweet spot is anywhere from $10 million to $15 million.

Its average loan has a balance of $3 million. Wright said his team will write anywhere from 200 to 250 loans this year. Its loans typically are structured with a term of three years, with possible extensions, and require a fee of 1 to 2 percent on origination and pay off. Coupons range from 7 percent to 12 percent, depending on where in the capital stack it’s playing, the value of collateral and types of guarantees.

Wright noted that it had provided…

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