2023 was a year marred by obstacles for borrowing across commercial real estate, particularly after a widespread crisis shook regional banks that are historically the biggest lenders in the space.
But Peachtree Group Managing Partner and CEO Greg Friedman said he expects financing to be better in 2024, albeit with some persistent hurdles.
On the first Hotel News Now podcast episode of the New Year, Friedman said his prediction is for a "much more robust lending environment in 2024, especially for hotels."
"On the reverse side, I do believe we're going to continue to have a lot of challenges across commercial real estate that will ultimately impact our industry, the hotel industry," Friedman said.
Skepticism and banking regulations that will have a negative impact on real estate lending are a double-edged sword for hoteliers, Friedman said. More lenders looking to place their capital in real estate will be inclined to push money into hotels compared to struggling sectors such as office.
Friedman is optimistic, too, that a more stable environment and continued strong lodging fundamentals will give "traditional lenders" that had been sidelined in 2023 enough confidence to come back this year.
"And because of that stability within capital markets, I do think it's going to make it a more viable lending market because it's going to allow traditional lenders to be able to start to come back," he said.
Peachtree itself operates as both a hotel investor and lender, and Friedman said this has been a good time to step up his company's lending activities to help fill the void left by others. That includes putting money into hotel construction, something that has been exceedingly rare in the past few years.
"We like to do construction loans because I think personally that in our industry, new wins," he said.
For Hotel News Now's full conversation with Peachtree Group's Greg Friedman, listen to the podcast above and subscribe to the Hotel News Now podcast on Apple Podcasts, Spotify or wherever you find podcasts.