April 13, 2017
Access Point Financial, LLC is thrilled to join forces with AAHOA and Hotel Management to create the groundbreaking HotelROI program. This invaluable program will equip hoteliers with insight spanning operations, cost saving technology, market conditions, pipeline information, and development opportunities. In 2017, HotelROI will be making stops in Atlanta, Baltimore, Charlotte, Chicago, Houston, Los Angeles, and Pittsburgh. With limited spots open, register now at AAHOA.com!
March 30, 2017
Here’s our 30-second recap of the 2017 Hunter Hotel Conference!
2017 Hunter Hotel Conference Recap from Access Point Financial, Inc. on Vimeo.
February 1, 2017
January 27, 2017
In case you missed ALIS 2017, here’s our 30-second recap!
October 19, 2016
October 10, 2016
Access Point Financial, Inc. managing director Heather Duvall joined a roundtable discussion hosted by Hotel News Now in Phoenix, Arizona. Among the topics she commented on:
1. The words that best describe the financing environment
2. A look at the state of hotel lending
3. Brand choice a key piece of the hotel lending puzzle
4. Five things borrowers should know
Video: What lenders expect in the next 18 months
Video: What hotel metrics lenders look at
Video: Lenders share advice for borrowers
Video: How lenders look at the economy
October 10, 2016
Access Point Financial, Inc. managing director Heather Duvall sat down with GlobeSt.com to describe the unknowns in the current lending landscape. Check out her interview here >
October 3, 2016
Continue readingOctober 3, 2016
ATLANTA—Jon S. Wright, CEO of Access Point Financial,Inc. (APF), recently discussed the types of issues the hospitality industry is facing in the current lending climate. In the second part of that interview, he shared concerns about supply and competition, talk of recession, and trends in hospitality lending in the future.
GlobeSt.com: Are there any markets or regions you’re focused on, or markets you’re staying away from? Why?
Jon Wright: At APF we lend throughout the 50 states and Canada, and we focus on markets with multiple demand generators. For instance, if the market is reliant solely on the oil and gas industry, we will pass on the transaction. Demand generators to make for a successful hotel operation typically include verifiable and recurring locally entrenched businesses, along with government group and leisure demands prominent in the area. Assets we finance should close proximity to these segments so that guests have easy access to what the market has to offer.
GlobeSt.com: Supply growth is much talked about in the industry today. How worried are you about it?
Wright: Following the downturn in the economy, many new build projects were postponed or tabled altogether. Today, franchisors are looking to quickly add to supply via conversions rather than new construction loans which have perceived operating risk and delayed revenue impact, although the US hotel industry is projected to experience continued growth through the foreseeable future. Supply growth in high barrier-to-entry markets will not have a significant impact on values as cap rates should remain low in those markets. In low barrier-to-entry markets, where supply growth is high, we will see a gradual increase to cap rates and tempered RevPAR growth as compared to more robust RevPAR growth in prior years.
GlobeSt.com: Is there more or less competition among lenders right now? How so?
Wright: We are sustaining competition between community, regional banks, CMBS and SBA lenders all competing to refinance stabilized assets and to a lesser extent, new construction lenders are competing for ground up construction if a uniquely qualified risk candidate. However, at APF, our primary focus is value add in 25-year bridge loans whereby the borrower is repositioning an asset which currently underperforms the market. Typically, our applicants seek acquisition and renovation debt, in concert with the rebranding of an existing asset, or separately as a standalone renovation/PIP 36-month short term with 25 year amortization loan to facilitate brand mandates.
In some instances, we can also assist in the overall capital stack for a new construction project whereby a sub-debt tranche satisfies funding for FF&E (which is generally about 20% of the total project costs). This allows the first mortgage lender to limit their overall exposure risk and the developer to reduce the overall cash equity requirement in the project. Access Point Financial still requires the borrower inject a minimum of 20-30% equity validate pro forma results of 1.25x debt-service coverage ratio at stabilization (typically 24 to 36 months forward in our underwriting model). The sub debt tranche provides interest only for up to 18 months, followed by a fully amortized period to coincide with the useful life of the FF&E. Senior debt lenders view the sub debt as a disciplined approach with a contractual “right to cure” or assumption of the sub debt.
GlobeSt.com: The industry has seen a lot of M&A activity in the past two years. What kind of effect has this had? How do you see that evolving in the future?
Wright: We have seen tempered exuberance this year, and yet despite political and economic uncertainty, it has obviously been a busy time for M&A activity for many companies. In spite of China’s slowdown and other global economic pressures, low interest rates/cheap financing will continue to create an interest in M&A deal making. At APF, we have been on the debt side for quite a few hotel acquisitions of late. Our clients are opportunistic in sourcing underperforming or undervalued assets. M&A activity to acquire, renovate, reposition and possibly rebrand the asset, thereby creating value for investors via the future refinance takeout, typically 18-24 months out. This provides tighter spread, wider amortization, less recourse, all resulting in exploited proceeds.
GlobeSt.com: Are there any other trends or influences you’re keeping an eye on as you look toward the future?
Wright: Many believe 2015, may have been the high water mark in the hospitality industry recovery, yet we are still seeing RevPAR growth in many markets. That said, there are some headwinds: the possibility of rising interest rates are frequently being discussed by the Federal Reserve; tighter loan underwriting policies from banks; the coming CMBS loan maturities in late 2016 through 2018; the volatility of overseas economies and the effect it has on US tourism; the threat of Airbnb supply in different markets as well as the difficulty tracking these figures. We are also cognizant of the US experiencing the slowest economic recovery in the post-World War II era. While the current unemployment numbers are decent, the nation’s real unemployment rate was 10.1% in July 2016. While these concerns exist, APF relies on time proven underwriting metrics that allow knowledgeable and experienced sponsors to access capital needed to grow and improve hotel portfolio investment returns. Our underwriting risk model accounts for stress simulations of up to 250 BPS, along with amortization compression to likewise simulate stressed cash flow due to uncertainty currently baked into our analysis. We have closed roughly 600 transactions in the prior 48 months with capital commitments of $1.5 Billion and book value (on loan to cost basis) of almost $3 Billion (or 50% LTV), and LTC of our average debt placed being 65%. Our corporate officers all have deeply embedded cash invested in the company, alongside our private equity partners, which now totals North of $200 Million and each transaction is supported and also leveraged debt of brand name partners’ such as Key Bank, East West Bank, JP Morgan and others. This accounts for low bad debt over time and we do not own or operate hotels and never have, making us a true capital partner vs a predatory “loan to own” model.
The interview was originally posted on GlobeSt.com.
September 20, 2016
September 16, 2016
ATLANTA—Jon S. Wright, chief executive officer of Access Point Financial, recently discussed what types of issues the hospitality industry is facing in the current lending climate. In a recent interview, he shared his views and what is in store for hospitality lending in the foreseeable future.
GlobeSt.com: How conservative is the lending community right now? Would you say hospitality is being disciplined? How so?
Jon Wright: The Fed has effectively tightened up-clarified regulations pertaining to restrictions/language that hotels book only a finite exposure for hospitality. Access Point Financial has carved out a niche whereby not only mortgage, but also Capex – C&I are inclusive in our product offerings, alongside leverage partners (via globally recognized banks) which facilitates production levels commensurate with our funding projections of roughly $500MM for 2016. We simply don’t see many newcomers in this space due to increased oversight and regulations currently in place. We’ve kept our finger on the pulse of the industry for 25 years. There is a human tendency to rush to complete a loan but such exuberance is too aggressive. Although we may take a risk on the front end, historically, we have taken a conservative approach and are long-term players. We target low to mid-teens refinanced every 18 months, which are attractive to banks with their conservative approach. We keep current for investor appetites with packages leveraged. We weather storms by keeping the lines of credit healthy if the music stops again.
GlobeSt.com: Given the current climate, is now a time to refinance, sell, buy? Why? What type of pricing expectations should owners have?
Wright: Depending on a variety of variables, each owner operator currently is, or has already, refinanced eligible assets. Access Point Financial tends to lean towards prevailing and bullish opinions that the timing is ripe to sell with cap rates starting to rise, many owners are looking to cash OUT on increased values during the last few years. An increase in supply in some markets may have an impact on performance which could possibly have an owner looking to exit prior to continued dilution of value. With historically low interest rates and the CMBS market deviable, refinancing is a possible option for many borrowers.
GlobeSt.com: How would you evaluate the quality of deals you’re currently seeing?
Wright: Because of long term presence and reputation, we’ve been able to improve our capabilities to weather downturns. Marginal developers don’t come to us; our hit rate is high as we pre-screen with a consistent message and don’t spend time with investments that aren’t feasible. A food chain of viable loans develops over time. For example, we don’t service new owner-operator transactions.
GlobeSt.com: Typically, what kind of underwriting are you seeing? What factors are you looking at when you’re underwriting?
Wright: We look at LTV or LTC for projects that can be upgraded and stabilized. There are clear definitions of LTV/LTC that require owners to have real cash and not just pay for play appraisals.
They must have skin in the game because it is not a one-size-fits-all play. Today’s technology provides background checks instantaneously. We normally know about deals and respective players because of the relationships we’ve developed over almost 3 decades.
The interview was originally posted on GlobeSt.com.
April 13, 2017
Access Point Financial, LLC is thrilled to join forces with AAHOA and Hotel Management to create the groundbreaking HotelROI program. This invaluable program will equip hoteliers with insight spanning operations, cost saving technology, market conditions, pipeline information, and development opportunities. In 2017, HotelROI will be making stops in Atlanta, Baltimore, Charlotte, Chicago, Houston, Los Angeles, and Pittsburgh. With limited spots open, register now at AAHOA.com!
