Hotel Properties Tricky Collateral For Loans


[author: funding slowly returns for hotel properties, lenders should be more cautious when underwriting hotels as collateral for loans. Unlike other types of commercial real estate properties such as retail, office or multifamily properties, hotels are prone to extreme fluctuations in revenue and operating expenses. Lenders should keep this in mind when originating loans involving hotel properties as collateral, and address business issues and other potential pitfalls unique to this type of asset.

In a recent article in the Scotsman Guide, I address five problem areas – personal property, franchise agreements, renovations, comfort letters, and liquor licenses - that will likely be addressed by lenders at loan origination to protect the value of the collateral in a default situation. Having successfully represented a number of owners and lenders of hotels, we can attest that while hotels can be tricky collateral, an experienced legal team that understands the complexities of hotel lending can help minimize risk and avoid the pitfalls.

To read the full article, please click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bilzin Sumberg Baena Price & Axelrod LLP | Attorney Advertising

Written by:


Bilzin Sumberg Baena Price & Axelrod LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.