Access Point Financial, a direct full-service lending and advisory firm focused on the hospitality industry, said it has surpassed the $500-million hotel loan threshold based on loans scheduled for closing this month. This represents over 275 loans and more than $1.0 billion in hotel asset valuations since inception.
The company said demand continues to build and its current pre-screened pipeline is approaching another $400 million. “We were the first hotel-vertical lender to open our doors for new loan transactions in 2011, ahead of the curve,” said Jon Wright, president and CEO of Access Point Financial. “Our focus has always been as a lender only, with no interest in hotel ownership or management, which enhances our relationships with borrowers. The last thing we want is to foreclose and/or replace management of an asset.
“This was a welcome respite from exclusively overseeing and successfully liquidating our nearly $2 billion loan portfolio assembled from 2005-2008,” he noted. “We concentrated on servicing our loans from 2009-2011, resulting in a current pay rate of 98.5 percent due to the strength and expertise of our client base and stringent risk management. Because we work only with experienced owners and top tier brands, we historically have enjoyed a solid credit rating.”
APF’s growth has focused primarily on repositioning assets via short-term mortgage bridge loans and capital expenditures loans. Loans range from $250,000 to $25 million with up to 18 months of interest only for a mid-market hotel asset. Once the hotel upgrade is underway and the property reaches stabilization, owners often refinance the hotel asset with their local banks or other relationship lenders. Prepayment occurs within the 18-month interest only period on a more frequent basis than historically.
CapEx spending dropped 40 percent in 2009 due to the significant economic decline and resultant impact on the hotel industry, according to a study by Bjorn Hanson, clinical professor at the Preston Robert Tisch Center for Hospitality and Tourism at the NYU School of Professional Studies. CapEx spending has increased every year since 2010 and is expected to reach a record $6 billion in 2014, the study reported. Based on that estimate, APF will review a good portion of the brand mandated license execution.
“Many owners were granted temporary relief from renovations during the downturn, but that time has come and gone,” Wright said. “Brands are aggressively enforcing their standards and are requiring Product Improvement Plans (PIPs), Refresh or Rejuvenation (depending on the brand) to be completed quickly, especially if a change of ownership. Owners who choose ‘not’ to renovate are being flushed out of their respective franchise systems and stand the real risk of having to migrate downward to a lower-rated brand, which negatively impacts asset value.”