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Hotel Financing: What are lenders looking for?

By Russ Reynolds and My PhungHotel Valuation • 28th February 2008

 

Historically, accommodation properties been considered a risky investment for most commercial lenders. However, the past few years have proven that the hotel industry is a lucrative and active market, and lenders – both traditional and nontraditional – have been increasingly more competitive for this business. Who are the players in hotel financing? Essentially, lenders can be categorized as either portfolio lenders or conduit lenders. The former represents the traditional lender who originates the mortgage loan and holds onto it on the balance sheet through the maturity of the term. On the other hand, conduit lenders or Commercial Mortgage Backed Securities…

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