Financing

Need hotel financing? Wells Fargo is your bank

27 Jan, 2012 By: David Eisen

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Anne Hampton, VP of Wells Fargo Bank Hospitality Finance, at right, with Sean Hennessey, CEO of Lodging Advisors LLC.

Much has been made of the tight credit markets and dearth of bank lending, particularly for hotel projects. However, there is one bright spot that is slowly but surely opening its vaults: Wells Fargo & Co.

Hotel Management hosted and sponsored the Lodging Industry Investment Council (LIIC) roundtable, which ran concurrent with the Americas Lodging Investment Summit, in Los Angeles earlier this week.

While many topics were bandied—from hotel market fundamentals to the varied plays of real estate invesment trusts and private equity—what was on top of mind was this: Is there availabilty of financing for hotel projects and acquisitions?

While the answer still may be—'not so much'—there does appear to be one bank that is less afraid than others to committ financing for hotel projects—the aforementioned Wells Fargo.

Anne Hampton, VP of Wells Fargo Bank Hospitality Finance, was part of the LIIC roundtable, and made it clear that Wells Fargo was open to the idea of lending funds toward hotel development. "We think we’re in the ultimate spot to be making loans right now," she said. "We think now is a great opportunity." She also has her list of types of hotel projects Wells Fargo is interested in underwriting. "We like upper-upscale, limited service and upscale full-service hotels," she said, adding that they should be flagged by top brands, in top 25 markets and be multi-demand generators. "We stay away from one-demand-generator markets," Hampton said.

Although Hampton said Wells Fargo is in a position to lend now, don't be surprised if you get turned down for a loan that deals with ground-up construction—acquisitions are more their speed. "We're not really looking at construction," Hampton said. "It just doesn't pencil out. Construction is a lot more work. There are so many more cash-flowing assets in key markets."

Ultimately, Wells Fargo will remain vigilant and unafraid to commit toward hotel financing. "We are very bullish," Hampton said. "We originated nearly two billion in hotel loans in 2011. We’re looking at 2012 being strong. We’re a short-term balance lender—three to five years, in gateway markets. Our sweet spot is $40 to $60 million, and will go as low as $20 million. Our pipeline now for existing hotel loans is strong."

The proof is in the pudding—as they say. Today, the Atlanta Business Chronicle reported that Atlanta-based Access Point Financial Inc. closed on a senior secured credit facility with Wells Fargo Capital Finance, that will help finance hotel development. Access Point is a full-service lending and advisory company focused on the hospitality industry and will reportedly use the revolving debt facility, which starts at $150 million, in partnership with its $100 million equity, to place $1 billion in loans for hotel improvements and bridge financing for the next 26 months, according to Jon Wright, president and CEO of Access Point. "We are in the early stages of seeing meaningful debt funding," he said.

• For more on what went down at LIIC, along with ALIS coverage, make sure to check out the February and March issues of Hotel Management.

 

 

Topic : LIIC, ALIS, Wells Fargo, Bank, Loans
External Source : Atlanta Business Chronicle