In the Central Valley of CA, there are alot of JV opportunities for great sites. Many of the land owners want to contribute the land and nothing else. How real is this? Not very. At the end of the day, b0th sides are looking for an equal amount of skin in the game. The question is, how much? It can be cash, a piece of an existing asset - it is totally negotiable. Since new hotel construction is not getting done, that does not slow down the drum beat of the Franchisor and their unquenchable appetiate for new hotels. Cambria is making financing available to developers; will others follow suit? I think you will see brands that are facing extreme presure begin to offer this access.
If your following this blog, I welcome any feedback. If there are topics that you would like for me to address; I would be glad to.
Wednesday, January 28, 2009
Sunday, January 25, 2009
Distressed Hotel Assets in N. CA
The number of distressed hotels in N. CA is growing. In response, PKF Capital, the sister company of PKF Consulting, has launched its Distressed Hotel Solutions Program in response to the increasing number of financially troubled U.S. Hotels, whose owners, lenders and legal representatives may be entering a crisis mode.
PKF is prepared to help hotel owners who became over-leveraged with debt during the recent easy credit years and are now faced with declining revenues and repayment due dates on the horizon.
"Our research division has recently taken the unprecedented step of issuing a mid-quarter update underscoring the speed and severity of this current decline, and it points to the timeliness and importance of this DHSP to owners and lenders," says PKF Capital’s Executive Managing Director Bob Eaton.
The take away for owners/investors of hotel real estate is to analyze the current debt, take a hard look at your expenses. I would recommend connecting with a consultant and/or hotel broker who can explain your options and assist you in the process. Many times, the answer is not to sell the asset.
If the best option is to sell the asset, make sure the consultant/broker is using cap rates/discount rates that the market most likely trend to. Currently, I am seeing cap rates in the double digits in the Valley. It goes without saying that the seller cap rate is still in the 9's or even 8's; that is a no win situation. As a broker, that needs to be a deal breaker. The client needs to get to a 10 cap mentally prior to market launch.
Have any questions on the market or the metrics involved, give me a call at 916-830-2622.
PKF is prepared to help hotel owners who became over-leveraged with debt during the recent easy credit years and are now faced with declining revenues and repayment due dates on the horizon.
"Our research division has recently taken the unprecedented step of issuing a mid-quarter update underscoring the speed and severity of this current decline, and it points to the timeliness and importance of this DHSP to owners and lenders," says PKF Capital’s Executive Managing Director Bob Eaton.
The take away for owners/investors of hotel real estate is to analyze the current debt, take a hard look at your expenses. I would recommend connecting with a consultant and/or hotel broker who can explain your options and assist you in the process. Many times, the answer is not to sell the asset.
If the best option is to sell the asset, make sure the consultant/broker is using cap rates/discount rates that the market most likely trend to. Currently, I am seeing cap rates in the double digits in the Valley. It goes without saying that the seller cap rate is still in the 9's or even 8's; that is a no win situation. As a broker, that needs to be a deal breaker. The client needs to get to a 10 cap mentally prior to market launch.
Have any questions on the market or the metrics involved, give me a call at 916-830-2622.
Hotel Brokerage in Northern California
My goal with this blog is to keep you up to speed on the hotel brokerage market in Northern CA as well as provide insight into marketing, news, industry forecasts and other timely articles that could help you as an owner.
If you would like for me to meet or talk with you regarding your hotel and the market you are in, please feel free to email me at dan.hayward@pkfc.com.
If you would like for me to meet or talk with you regarding your hotel and the market you are in, please feel free to email me at dan.hayward@pkfc.com.
Subscribe to:
Posts (Atom)
