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Investment Banking - Americas - Special Hospitality Assets Group
Investment Preservation in Challenging Times
Hotel, resort and shared-ownership investors, owners, lenders and borrowers are now faced with difficult decisions, stemming from the uncertain business environments in which their investments operate. Drawing on HVS’ global consulting and valuation services organization, HVS Special Asset Hospitality Group offers a comprehensive and integrated set of capabilities for transactional, consulting, valuation, and investment management services in order to proactively identify vulnerabilities within loan and asset portfolios, and to efficiently facilitate workouts of distressed asset situations.
It is difficult to determine the full extent of the liquidity crisis and its effect on overall economic conditions, and how that will affect hotel performance, as the magnitude of the current situation is unprecedented. What does this mean for hotel loans originated and underwritten prior to this unforeseen crisis? It is possible that record numbers of hotel loans will begin to approach their debt service coverage covenant floors, as the hotels securing these loans will not be able to generate sufficient cash flow to cover debt service requirements. Alternatively, hotels with sufficient cash flow with maturing loans may face the risk of not being able to refinance due to the lack of liquidity in the market. Inevitably, these mortgage notes will become delinquent, and potentially default. Lenders and borrowers will need specialized services to cooperatively maximize their positions in workout situations as expeditiously as possible.
Comprised of HVS’s global network of offices, divisions, and strategic alliances, HVS Special Asset Hospitality Group is a team of seasoned industry professionals dedicated to assisting hospitality lenders and borrowers in these challenging times.
- Assess the strengths and weaknesses of hospitality real estate assets
- Develop a strategic asset management plan to address potential distressed assets
- Buy/sell performing, sub-performing, and non-performing mortgage notes
- Provide valuation services, including mark-to-market "as-is" and future date valuations
- Restructure debt and equity financing
- Perform asset and property management
- Monitor workouts and rehabilitation of loans/hotel assets
- Arrange asset/portfolio acquisitions and dispositions
- Assist in implementing strategic repositioning and renovation of hospitality real estate assets
- Arrange specialized legal counseling
- Provide an experienced hotel receiver
HVS Special Hospitality Assets Group - Scope of Services
Performing Loans
Sub-Performing Loans
Non-Performing Loans
Foreclosures/ Potential Bankruptcies
REO
Asset Sales
- Hospitality Collateral Review
- Physical Asset Evaluation
- Franchise & Brand Review
- Management & Operations Reviews
- Capital Structure Evaluation
- Ownership Evaluation/Consultation
- Legal Services
- Management Contract Review
- Loan Document Review
The Hospitality Collateral Review is a critical step in identifying changes in hospitality investments and preserving asset value and loan collateral. HVS Special Hospitality Assets Group assists owners, investors, borrowers and lenders with in-depth reviews of the hotel’s physical condition; the suitability of the brand; sales, marketing and operations management; local market conditions; and key financial indicators that can act as "trip wires" in predicting potential financial problems long before they are evident in the Profit & Loss Statement. Ownership’s financial capcity is evaluated to determine future capital restructuring scenarios.
- Strategic Asset Management Planning
- Hotel Sales (On Behalf Of Existing Owners)
- Mortgage Note Sales
- Capital Restructuring – Debt & Equity
- Valuation Services
- Mark-To-Market – "As-Is"
- Future Date Valuations
- Hotel Management
- Legal Services
- Pre-Packaged Bankruptcies
- Forbearance Agreements
- Deed-In-Lieu
- Standstill Agreements
HVS Special Hospitality Assets Group assists lenders and borrowers throughout the workout phase by developing an asset management strategy based on the Collateral Review; performing valuation services based on current asset condition and future value scenarios; interim hotel management; sales of assets/notes; restructuring of loans; introducing new capital ("white knights") to the capital structure; and along with legal counsel, negotiations of forbearance agreements, pre-packaged bankruptcies, and other legal strategies.
- Asset Management
- Hotel Sales/Auctions (On Behalf Of Bankruptcy Trustees)
- Receivership Services
- Hotel Management For Trustee Or Receiver
- Accounting/Consulting/Valuation Services
- Legal Services
- Receivership, Bankruptcy & Mortgage Realization
- Transaction Negotiation & Documentation
During this phase, HVS Special Asset Hospitality Group assists bankruptcy trustees and other related entities with asset management services; evaluating potential asset sales and, if appropriate, marketing the asset for sale; HVS Special Hospitality Assets Group also provides an experienced Receiver and/or interim Hotel Manager; forensic accounting & financial statement reconstruction; valuation & consulting; and in conjunction with legal counsel, negotiating the requisite legal documentation.
- Hotel Sales/Auctions (On Behalf Of Institutional Lender Owners)
- Hotel Management
- Asset Management
- Hotel Renovation/Repositioning
- Acquisition Financing
- Legal Services
- Transaction Negotiation & Documentation
As assets become Real Estate Owned, HVS Special Hospitality Assets Group assists institutional owners by providing interim hotel management and/or asset management services. Depending on the investment horizon of the owner, clients may be advised on strategic repositioning and renovation of the asset. In the case of asset disposition, HVS Special Hospitality Assets Group markets properties for sellers and assists buyers with the raising of debt and equity for acquisitions.
