NEW YORK— Money has been hard to find over the past six months and— when finally located— often comes with onerous conditions. That fact should come as no surprise considering “many banks were already exiting the hotel marketplace long before the catastrophic events of 9/11.” So said a penal of lending experts and capital-market executives during the course of an afternoon workshop at the 24th Annual NYU International Hospitality Industry Investment Conference here today as they explored the finer points of financing to the industry and what would-be borrowers might logically expect when they go into the market for money. Widely offered up to session moderator Art Adler of Jones Lang LaSalle Hotels as evidence that “tight underwriting and low LTVs” have proven to be the way to go in the hotel-financing arena, the assembled panelists noted monetary defaults by hotels have been (virtually) non-existent within the confines of their respective loan portfolios…despite the obvious downturn in lodging-property performance and profitability over the past year or so. With regard to technical defaults that have come to the fore of late, Rick Rogovin of TIAA-CREF may have best summed up the mindset of most capital sources when he offered: “If you meet your debt service, nothing matters. And conversely, if you don’t meet your debt service, nothing matters [i.e. helps].”—Michael Billig
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