VIENNA, VA— A significant number of hotel developers, operators and owners are turning their gaze toward General Motors Acceptance Corp. (GMAC) in the wake of reports the company may be looking to sell-off its commercial-mortgage business. Noting that nothing at this time is definite, GMAC sources told HOTEL BUSINESS® the company is only in the “consideration” stage of such a move. In any case, such a sell-off would reportedly be driven by the very success this particular part of the business has enjoyed over the past nine years, a GMAC spokesman in New York City said. As he explained, mortgage and financing transactions have proven to be “a very profitable part of the business for GMAC.” Certainly, the size and scope of the company’s loan-servicing portfolio has expanded faster and further than the company might have originally anticipated back in 1994. Specifically, it was noted that portfolio at start-up nearly a decade ago “amounted to some $5 billion, whereas [in 2002]it totaled in excess of $160 billion.” Accordingly, the spokesman said any disposition of this line of business by the lending/financing arm of General Motors would be because the current situation raises some very real “access-to-capital issues.” By all accounts, this line of business has been on a tremendous trajectory over the years. “However, for this commercial-mortgage business to remain on that trajectory,” the spokesman said, “it needs more access to capital than GMAC can provide.” Breaking it down for the hotel-lending end of the business, Jerry Earnest— newly named executive vp of the Specialty Lending Group, with responsibility for the hospitality, golf and health-care arenas— contended: “Last year, we did about $650 million in hotel financing, encompassing a mix of acquisition, development and refinancing lending. This year,” he said, “we’ve been busier than any time since 1998. At this point, I’d say we’re on pace to lend somewhere around $800 million [to hotel/lodging interests].” As Earnest further noted: “We’ve been doing hotel-financing since March of 1996 and, since then, have accounted for more than $4 billion in lending.” At this time, calls placed to other major lenders and/or financial institutions with the perceived financial wherewithal to take over most— if not all— of the GMAC loan-servicing portfolio found none admitting to any concrete plans along these lines… particularly in light of what is still largely conjecture about GMAC’s intent to spin off this business.
Jerry Earnest