Three Chicago-based firms have formed a joint venture to provide a beginning-to-end hotel receivership platform for financial institutions, banks, special receivers and debt fund servicers throughout the United States, Caribbean and Canada.
Frontline Real Estate Partners: Hospitality Division was developed by leaders from Frontline Real Estate Partners, Four Corners Advisors and Aries Capital. The new JV comes nearly two years after Aries Capital and Four Corners formed a strategic alliance to provide an advisory, transaction and financing platform for hotel developers and investors
“The hotel market is facing a downturn unlike any we’ve experienced in recent history owing to the global pandemic,” said Michael Shindler, president and CEO of Four Corners Advisors. “Many hotels are shuttered and those that aren’t are operating at desperately low occupancy levels. Hotel owners are finding it necessary to defer loan payments or enter forbearance agreements, all of which are likely to expire before the market can fully recover. This is creating an unprecedented need for financing and receivership analysis, as well as expert guidance on how to best generate maximum recovery for lien holders.”
The new hospitality joint venture will provide services from initial evaluations through the conclusion of the potential foreclosure process. The principals will provide marketplace analysis, broker valuations, financing services, receivership management, note sales, expert testimony and brokerage and disposition services aimed at hotel, luxury resort and gaming resort properties valued at $5 million to more than $100 million.
“The advantage of the hospitality division as a joint-venture lies in the ability to combine our expertise with the relationships we have built over decades across all aspects of the hotel industry,” said Neil Freeman, chairman and CEO of Aries Capital. “For example, [Shindler] and I bring a wealth of knowledge of hotel brands and management companies, between the two of us having worked with at least 50 management companies and every major and not so major hotel brand on both the finance and operation sides. Our talents pair well with Frontline’s full-service real estate platform and direct relationships with the special servicers.”
By aligning resources, said Joshua Joseph, principal of Frontline Real Estate Partners, the joint venture aims to provide a “seasoned team” of owners and managers to handle complex hospitality deals. “This first-hand experience, combined with our unique and complementary expertise, is a natural fit and enables us to jointly offer a full suite of strategic and customized receivership solutions to our special servicer clients, lenders and other debt servicers during these turbulent times,” said Matthew Tarshis, EVP of Frontline Real Estate Partners.
Joseph is one of the founders and principals of Frontline Real Estate Partners and has consummated real estate transactions both as a principal and an advisor in more than 40 states. Tarshis brings leasing and property-management expertise to the team, specializing in lease negotiations, sales, purchasing, market research and broker valuations. Shindler, an attorney by education, has led complex hotel and mixed-use development projects internationally in senior management positions at Mandarin Oriental Hotel Group, Hyatt Corporation, Las Vegas Sands Corp. and Hard Rock Hotels & Resorts. Freeman’s firm, Aries Capital, has leveraged new financing techniques such as Fannie Mae agency lending in the 1980s, commercial mortgage-backed securities in the 1990s and New Market Tax Credits in the 2000s.