Hotel Financing Seminar

Please join us for this informative webinar today.  If you can not participate you can access the webinar through our sponsor. The link is the title to the webinar.


Hotel Financing Structures and Options in the Hospitality Industry Upswing

Leveraging CMBS Capital Market Financing, Preferred Equity, Tax Credit Funds and EB-5 Financing

The hotel industry is in an upswing as this cyclical industry continues to heat up and is one of the most active real estate segments in today's economy. How can counsel pave the way for hotel clients to identify and negotiate financing deals?

While financing from traditional lenders is relatively scarce, savvy industry insiders are finding additional sources of financing and are driving a new era of innovation in real estate finance. Preferred equity investments, tax credit funds and EB-5 financingare common.

Commercial mortgaged-back-securities loans, historically an important hotel financing source, came back into play in recent years. New CMBS loans are more complex and difficult to navigate than before, but can be a critical source of financing for certain deals.

Listen as our authoritative panel of real estate finance attorneys guides you through the various financing tools and sources of money available for hotel financing, including CMBS financing, tax credit funds, EB-5 financing and preferred equity investments. The panel will also address legal issues that can present financing challenges in this post-recession environment. 


  1. Pre-recession/recession
    1. Easy money
    2. Cleaning out the distressed properties and loans
  2. Current available sources of financing
    1. Private investor dollars (preferred equity)
    2. Tax credit funds (new market/historic tax credits)
    3. EB-5 financing
    4. CMBS capital market financing
  3. CMBS type loan structures and requirements
  4. Collateralizing the management and franchise agreements
    1. Comfort letters
    2. Subordinations
    3. Collateral assignments
  5. Bankruptcy remote organizational structures and covenants


Bradley KaplanPartner
Ulmer & Berne, Cincinnati

Mr. Kaplan assists owners, operators and receivers of hotel, office and industrial properties with their real estate, finance, leasing, construction and organizational challenges; specifically, negotiating and drafting hospitality, purchase, sale, financing, leasing, construction, franchise and management agreements.  He serves as general counsel and national real estate counsel to several domestic and internationally based public and privately held companies.  


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Return of Retail Part Two

I recently speculated that retail must be back. I just attended the ICSC Idea Exchange in Columbus, Ohio and got further support for this idea.

Robert Myers, Chief Operating Officer of Philips Edison & Company, said they were now seeing increased occupancy rates in the mid 90% with positive absorption, low interest rates on lending, and high prices on sale. He also said attendance at ICSC events is up.


I met several smart ambitious young guys just getting into retail brokerage. I would not have thought this a good career path just a couple of years ago, so it is instructive to see smart guys choosing to enter the field.


I saw several new retailers looking for new locations. One of them was Fusian – think Chipotle does Sushi. Great idea and great place to eat if you haven’t tried it yet or it hasn’t come to your town yet.


Easton was jamming on a Tuesday night. Most restaurants had a wait – we ate at Cooper’s Hawk and didn’t mind the wait since we drank a couple glasses of wine. Cooper’s Hawk is another great concept. They make their own wine, which is better than you think, and the food was tremendous. But the retail stores were busy too – with a line waiting to get into Victoria’s Secret (although that may have had something to do with the fact they had a Victoria’s Secret model there).  


In fact Easton is expanding. The new Easton Gateway is well under construction. I went into the new Dick’s there which opened ahead of the Center. Must say it may be the best sporting goods store I have ever been in. 


And the mood of the conference was markedly upbeat, which in and of itself is a change.  So maybe cautious optimism is the appropriate byline.

Return of the New Shopping Center

For quite a while there has been very few new shopping centers being developed. Many people may have even questioned whether there would ever be any new significant shopping centers. Apparently, times have changed. In rapid succession, I have been engaged to do the lease up of two brand new, big time, large scale shopping centers.

Liberty Center is a new mixed use center being developed in Liberty Township, Ohio, just north of Cincinnati. Liberty Center will have over 750,000 square feet of retail/restaurant space, together with 75,000 square feet of office space, 240,000 square feet of residential apartments, and a hotel. Construction has started and leases have been executed. Grand Opening is scheduled for October, 2015.

Metropica is a new mixed use center being developed in Sunrise, Florida. Metropica will have over 450,000 square feet of retail/restaurant space, and it too will include office space, residential apartments, and a hotel. This project is just starting development but projects to be an impressive, high profile development. Grand Opening is scheduled for Spring, 2016.


Retail must be back, and not wholly replaced by the internet.

Golf Courses Changing their Swings !

While the rest of the real estate industry recovers from the downturn of the last several years, the golf course industry is struggling to emerge; it remains a buyer's market.  Some golf courses are converting to multi-use/multi-generational activities to attract more members and activity to their properties.  Others are converting from "member-owned equity" clubs to privately owned "non-equity" owned clubs.  Concert Golf Partners  has a interesting comparison in the difference between the two types of club ownership structure on their website.  

The more interesting trend which is affecting valuations is that much like other investment properties, the value of the real estate is now tied more to the cash flow generated by the business activities on the property rather than the raw value of the real estate. 

Foreign buyers have taken notice and have arrived in North America to go shopping for investment properties.  While the pricing may be attractive, deed restrictions requiring  a golfing use may prevent redevelopment. So, to survive and thrive, golf courses need to take a lesson and perhaps change their swing !

The New Water Fountain

 Recently, I had the opportunity to visit our firm's new Columbus, Ohio offices.  The office design and space use is so refreshing and sharp.  What caught my attention most was the creative re-design/re-purposing of the office kitchen (picture above).  No longer a galley room with a microwave, refrigerator and a toaster; today's office kitchen is similar to the open kitchens in our homes and the social collaborative spaces in coffee shops (which many use as defacto offices when out and about).  The New York Times picked up on this trend not long ago in an article describing variations on the theme of social networking spaces.  So, while office size contracts, the space dedicated to collaboration and networking expands.  

Two for the Price of One

If you do not know what "RevPar" is keep reading.  "RevPar" is defined as Revenue per Available Room or the total guest revenue divided by the total number of available rooms. ( STR Global  maintains a useful glossery of hospitality industry terms.)  RevPar is an important metric in the hospitality industry because it measures sold and unsold room revenue.  

So, why is this important to real estate developers and hoteliers ?  As the hotel industry rebounds and new properties are developed the competition for room revenue, especially in central business districts is heating up.  How do you help ensure that your RevPar is high while also bringing economies of scale to your development ?    

Develop a parcel which has two or three brands in or on the same property which share certain common facilities such as elevators, reservation systems, management and maintenance staff, kitchen facilities, parking facilities.  Take the old Cincinnati Enquirer building as an example.  This historic renovation in Cincinnati's central business district is being renovated by SREE Hotels into a dual branded Homewood Suites and Hampton Inn.  The project has been awarded Ohio Historic Tax Credits. When completed the development will operate two separate Hilton branded hotels which appeal to different types of consumers rather than one large hotel hoping that their target consumers fill all of their rooms every night.  

Just makes sense !




Strip Mall Deja Vu !

 Fortune Magazine  recently published an article relating to a conversation with the CEO of Kimco Realty, Dave Henry.  Henry makes some very compelling arguments as to why strip malls and brick and mortar retail in general is here to stay for a while and why the population demographics will continue to provide ample support. Henry is not the only industry executive to have this opinion.  Many retailers and food service outlets also agree by demonstrating with their new store openings.

So, next time you drive by a strip mall which is for sale, think about how it can be re-purposed or the tenant mix can be tweaked to appeal to today's consumers.

Re-Purposing for the Hospitality Industry

It seems that old is new again !  In cities throughout the U.S. buildings originally built for a specific purpose: banks, office buildings, schools and warehouses are being converted or "re-purposed" into other uses, but in particular into restaurants and hotels.  In Cincinnati alone there are three projects undergoing renovation for their new life as hotels (Old School for the Performing Arts, Enquirer Building and Bartlett Building). Recently, theNew York Times highlighted examples of re-purposing which are on-going throughout the country.  While this is not a new or novel idea, what is exciting and interesting is the focus on hospitality.  Could that signal that financing is flowing into hospitality uses in favor of other traditional uses ? Or, that central business districts where older buildings are generally situated are having a renaissance ? Or, both ?  These projects are ripe for historic and new market tax credit financing.  So, keep an eye out for the opportunity to save a piece of history and culture and bring life into your central business district.


Update: Interstate Land Sales Full Disclosure Act of 1968

Back when this Blog was in its infancy our partner, Kristin Boose, reported on the then legislative environment relating to the Interstate Land Sales Full Disclosure Act of 1968.  As many of you already know the Act is broad in its application and can be dangerous to a developer if not complied with to the letter.  Given the downturn in the real estate market in the last several years Congress saw fit to pass (410-0) H.R. 2600 which amends the Act to exempt out condominiums from Act's registration requirements.  The Senate version of H.R 2600 is awaiting action.  

The timing might be very good as this will reduce the red-tape for the development of condominium projects as new construction heats up.



Ohio Leads Nation in Construction Job Growth

Ohio added 4,000 new construction jobs in December, leading the country in gains for the month according to an analysis of Labor Department data released by The Associated General Contractors of America (“AGC”) last week.

The AGC’s analysis noted that construction firms added jobs in 34 states last year, but industry employment declined in 32 states between November and December – likely due to cold, wintery weather in parts of the country.

The overall construction hiring and business outlook for 2014 is generally positive according to the AGC’s study. While contractors in the South were the most optimistic in the majority of eleven different market segments, contractors in the Northeast were least optimistic. Midwestern contractors, including in Ohio, were most optimistic about the demand in the power construction and manufacturing construction market segments.

While contractors are generally more optimistic about 2014 than they have been since the start of the downturn, AGC’s analysis added that along with such growth, there will be new challenges for construction firms as they struggle to find enough skilled workers, cope with escalating materials and healthcare costs, and struggle to comply with expanding regulatory burdens.