How to Make the Best of Bad Times


The economic news is bad and getting worse. Occupancy fell off a cliff in October and is not recovering. Your loan may be due and no new financing is available. Your cash flow is not meeting debt coverage covenants and your lender wants you to pay down a portion of the note. Your lender or equity partner has refused to keep funding cash flow deficits when a renovation has gone over budget or gone on longer than expected.

These are real problems faced by hospitality property owners in today’s markets. The hurdle for such owners is to properly analyze their options. In a world of bad choices, how do you find the best choice? This article will offer some suggestions on how owners should approach today’s issues to maximize the chances for an acceptable restructure of existing financing.

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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.

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