HotelsMag September 2022 | Page 43

which could dampen their appetite for deals .

Right now , the mezz part of the capital structure is the most liquid , but that ’ s because it ’ s wildly mispriced . Mezz lenders are demanding loan spreads that are not much lower than where they ’ ve been historically , but the index is up over 2 % since March and is heading higher . As a result , many of the mezz lenders are quoting spreads that result in low / mid-teens coupons for 60 % to 75 % of the cap stack for existing assets . That ’ s a core-plus / value add level of return for moderate leverage debt risk – that trade won ’ t last . TARPEY : Buyers ’ not reliant on any type of financing will have a significant advantage in transacting at a lower basis , purely by giving the seller confidence in execution .

We may also see unique hotel and resort opportunities that will come on the market

THERE ARE JUST TOO MANY UNKNOWNS , AND MANY DEVELOPERS ARE OPTING TO PUT THEIR PENCILS DOWN RATHER THAN TO TRY TO DEAL WITH THE EVER-CHANGING MATH .

– JOHN FAREED ON HOW RATES ARE IMPACTING DEVELOPMENT

due to sellers raising liquidity . RODRIGUEZ : It creates an advantage for existing hotels with locked-in interest rates for a long period of time . MARITZ : It will be an advantage for those

with equity or access to bridge financing ( i . e ., deep pockets , longer term horizon ).

As North America ’ s leading third-party hospitality management company , Crescent Hotels & Resorts is trusted by Marriott , Hilton , Hyatt , IHG & more to deliver brand promises to guests each and every day . Our leaders leverage the latest technology to create superlative results for our owners .

From development to repositioning to operations , including tailored solutions for independent and lifestyle hotels in our Latitudes Collection , Crescent offers performance hospitality perfected .

Michael George , Founder , President & CEO