Lending expected to stay level with 2016, survey says
Lending expected to stay level with 2016, survey says
03 FEBRUARY 2017 8:29 AM

A survey of more than 40 lenders finds that the same cautious outlook which made borrowing tougher for hoteliers in 2016 is continuing into 2017. 

HENDERSONVILLE, Tennessee—Caution will continue to tighten the hotel lending landscape in 2017, according to an annual survey of more than 40 lenders.

The year-end 2016 Hotel Lending Survey conducted by STR, parent company of Hotel News Now, and RobertDouglas offers perspective on the factors that are driving, or acting as a barrier, to borrowing.

The predominant sentiment of survey participants—which included lenders that represented the majority of all hotel debt originating in the U.S. in 2016 (with loan balances in excess of $10 million)—is that investors should monitor hotel performance and macroeconomic trends. But lenders said they expect hotel lending volume to remain constant with 2016 levels over the next 12 months.

That’s consistent with what lenders told HNN for its year-end series of Lender Insight Q&As, which asked:

Those factors aside, location and quality of real estate remained the top “gating” criteria for financing a hotel development, with half of the surveyed lenders choosing that answer over cash flow metrics or the sponsor’s experience or track record.

Here’s five questions from the 2016 Hotel Lenders survey, and how lenders’ answers compared to surveys in previous years.

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