Hotels and Motels

Distressed Loans & Properties for Sale

…prices starting at 65% below Market Value
 

Hotel and Motel acquisition discount percentages for distressed loans will vary dependent upon the bank involved, the class of the Hospitality property and the location. Below are some of the typical acquisition parameters and ratios that have been achieved in the recent past (NOTE: past results are not a guarantee of future opportunities in this dynamically changing market):

Note Purchase Price to current FMV ratio: 70% to 35%

Note Price to UPB ratio: 90% to %30

Note Price per Room: $18,000 to $50,000

Below are some typical examples of recently transacted commercial Hotel/Motel notes:

  • West-Coastal Florida, 220 Rooms, Current Value = $8 Mil, ADR = $75/day
    Note Purchase Price = $4.2 Mil, Price/Room = $19,000
  • Northern California, 175 Rooms, Current Value = $13.5 Mil, ADR = $150/day
    Note Purchase Price = $7.2 Mil, Price/Room = $41,142
  • Northern Georgia, 235 Rooms, Current Value = $11.4 Mil, ADR = $90/day
    Note Purchase Price = $5.9 Mil, Price/Room = $25,100

CRE Xchange maintains a constant flow of institutional sellers that are in need to dispose of distressed loans for Hotels and Motels, throughout the Nation. We also uncover little known Hotel and Motel properties that have been foreclosed upon, and now bank (REO). As we uncover these distressed assets, we present these opportunities to our qualified and registered buyers who are seeking Hotel or Motel investments in their desire areas of purchase. Distressed commercial Hospitality notes typically yield a better discount from current market value, compared to buying bank owned hospitality properties. Some of the reasons for this fact are as follows:

  • By selling the Note, the Bank saves money by avoiding foreclosure and legal fee’s, compared to foreclosing and selling the bank owned property.
  • Banks that are need to raise cash quickly, can liquidate a non-performing commercial loan much faster, than the time required to file a notice of default, foreclosure and then market subject property for sale, and close.
  • When a Bank sells a Note, they avoid taking ownership of the subject property, thus eliminating costs associated with ownership.

There are two basic types of distressed commercial Hospitality notes. One form is a non-performing note in which the property owner has stopped making loan payments. The other form of distressed note, is a situation in which the property owner is current on their payments, but the commercial loan term has expired, and the property owner is unable to repay the bank for they lack the funds and/or they cannot find another bank to refinance the face value of the Note, due to more stringent lending standards and decreased market values.

Due to privacy requirements of the note selling banks, CRE Loan Exchange does not list commercial assets for sale on this website, and we do not email blast commercial tapes to nondescript investors. Using a secure protocol, we deliver current distressed loans for sale only to our member investors whose purchasing criteria matches the parameters of the distressed assets for sale.

See Acquisitions Trading Desk for more details.