Jon Wright had planned on a career in music, but instead found his livelihood in financing hotels. As the founder and CEO of Atlanta-based Access Point Financial, Wright leads a team of industry veterans in hospitality finance, supporting mortgages, new developments and renovations.
Growing up with a love of music inspired by his father (who he describes as being like the protagonist from “Mr. Holland’s Opus”) and his brother Mark, a songwriter/producer and current president of Show Dog-Universal Music, Wright originally had planned to spend his life creating songs. After graduating from the University of Arkansas, Wright followed his brother to Nashville to gain experience in the music industry, but needed a day job to pay the bills. He began training at the Ford Motor program for a role in junior management in its asset-based lending group, and soon was working in the company’s corporate real estate and asset-backed securities division, financing the “contents” of real estate—“everything but the land and building,” he said. In this role, he developed a taste for the financing industry—and for meeting the heads of corporate finance departments within large institutional corporations.
After four years, he was invited to interview with Holiday Inn Worldwide in Memphis. “Kemmons Wilson, the founder of Holiday Inn, had pioneered an in-house finance company called General Innkeepers Acceptance Corporation,” Wright said. The franchise industry was becoming very competitive, and Wilson wanted to jumpstart his “dormant” company by offering financing for Holiday Inn franchisees. Wright moved to Memphis and took over as managing director at GIAC, originating loans for franchise owners, overseeing the company’s finance subsidiary and supporting franchisee growth through senior- and sub-debt origination and syndication. “The first generation of hoteliers were still running the companies,” Wright recalled of those late-'80s days. “They were in the process of passing down their operations, their ownership of hotels through their family members. I was able to meet the first generation of franchise owners.”
By the late 1990s, General Motors was looking to gain a foothold in the hospitality sector, and recognized how Wright’s experience could help it grow. “After nearly 10 years with Holiday Inn, I started the asset-based finance group for General Motors,” he said. Over the next eight years, the GMAC Commercial Mortgage—Asset Backed Lending Division supported hospitality-related developments, either owned or serviced, to the tune of more than $4 billion. In 2005, he structured the group’s sale to an Atlanta-based bank consortium, renaming the division Specialty Finance Group.
When the financial crisis began, Wright’s team stopped originating loans. “We maintained our servicing function, so we were managing our book of $2 billion—which was eventually sold to Blackstone in 2011,” he said. After that transaction, Wright worked with Greenwich, Conn.-based private equity investment firm Stone Point Capital to launch Access Point Financial and jumpstart originations again once the economy began to improve in 2011.
Photo credit: Access Point Financial
As a lender, said Wright, Access Point has a unique position in the hospitality hierarchy—neither owner or operator, but involved in developments and redevelopments. “We don't compete with our borrowers,” he said. “You could imagine that if you're wanting to borrow money from a bank for your hotel, you don't want to have to look over your shoulder every day when you turn the lights on, wondering if something is happening with your loan.”
What keeps Access Point competitive over time, said Wright, is the company’s focus on what a property’s profits will be like after the opening or renovation—in some cases, years in advance. “We will look two years out at where the performance levels and trends will be in that time frame, and then we will lend against that loan-to-value, looking into the future,” he said. “And so although we might be a bit more expensive than banks in some transactions, we can advance more proceeds because we're giving you credit to future cash flows post-renovation.”
Clicking With Clients
“Our reputation over the years has kept us in the game. The brands recognize us. They refer us [to owners] very freely and very confidently because we issue term sheets with quick turnaround times and then we followed through. We do what we say we will do, and we do it quickly and we do it efficiently. It also goes to the point of, treating all of the brands with equal respect whenever we finance brands or even boutique hotels that are unbranded—that pricing and structure is either credit-worthy or not and we won't be reducing our pricing or extending the terms of the amortization just because we prefer one brand over the other. That's not the case. We're agnostic to branding.”
Logic in Logistics
“For existing assets, we pay heavy attention to loan-to-value. For new assets that are coming out of the ground, loan-to-cost is at the top of our list, and not so much loan-to-value, because there are no cash flows that have occurred yet to give us a sense of comfort on what the loan-to-value is of that asset. For new assets coming out of the ground—and sometimes assets that are trading hands—our typical loan is to assets and ownership groups that are investing in break-even (and sometimes south of break-even) cash flows because they intend to put new capital in, new equity, fresh powder into the hotel and upgrade it. Then we look for, like I said before, the pro forma of cash flow two years ahead of our closing of the loan, so that the operator is getting credit for taking risks, for instituting a renovation project and then reopening the asset. That's when the larger lenders and the institutions come in and refinance us, and we're able to regenerate our capital that way.”