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Hotel finance group rings in New Year with $400m in deals |
2006 has proven to be a very busy year for the AFC Hotel Finance Group.
In the last six months alone, the Manhattan-based company has completed the financing of 35 hotels representing over $400 million worth of financing, according to president Peter M. Berk.
The majority of the hotels consist of select and limited service brands for major franchise hoteliers such as Intercontinental Hotels Group, Hilton, Starwood, Marriot, Carlson and Choice Hotels.
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The financing for the hotels was all non-recourse financing and was provided by three different lending institutions which all offered extremely competitive interest rates for the properties.
"The capital markets continue to be extremely competitive for limited and select service product," Berk commented. "Owners of these types of hotels are able to drive higher profitability to the bottom line and the lenders reward this profitability often with better loan terms and interest rates then full service hotels."
Included in the transactions are hotels such as Holiday Inn (Raleigh, NC), Country Inn & Suites (Chattanooga, TN), Hampton Inn (Hinesville, GA), Country Inn & Suites (Gainesville, FL), Fairfield Inn Airport (Miami, FL), Towne Place Suites (East Lansing, MI), Holiday Inn Express (Austin, TX).
With the completion of the 35 hotel transactions in the second half of the year, the AFC Hotel Finance Group has completed over 80 hotel financing transactions in 2006 representing over $750 million in financing volume.
"Several factors can be attributed to the tremendous success and growth AFC Hotel Finance Group has experienced this year," Mr. Berk points out. "Our close relationship with lenders allows us to act quickly and structure deals that benefit both the financial institution and our clients.
"We've also displayed an ability to tackle more difficult transactions, utilizing our knowledge and expertise of the capital markets to arrange creative financial packages despite challenging obstacles.
"These financial packages often involve several layers of capital, including first mortgage projects, mezzanine financing and preferred equity.
"Most importantly, however, is our continued willingness to enter secondary and tertiary markets throughout the country and make available a full menu of financing options for prominent flagged hotel franchises that would otherwise have limited opportunities."
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