There are signs on the horizon that 2025 could be a demonstrably easier year for hotel developers and investors looking to find financing, but one expert says success in finding capital still requires creativity.
Speaking on the latest episode of the Hotel News Now podcast, Peachtree Group Managing Principal and CEO Greg Friedman said when compared to the pre-pandemic lending environment, the market remains "dislocated."
"The regional banks, the community banks, the national banks that used to make up 50% of the hotel lending market ... are still not able to lend at the same levels that they once could," he said.
But he believes investors who explore more creative financing vehicles, such as Commercial Property Assessed Clean Energy — commonly known as C-PACE — financing or EB5, and work with private lending platforms are more likely to succeed.
"If you're wanting and you're willing to move forward with projects, I think you're going to be able to find the capital in 2025," he said. "If you're able to be somewhat creative, I think you're probably going to find a much more accretive structure."
Peachtree Group itself is one such lender — along with doing their own hotel operations, development and investment — and Friedman said the field of private equity lenders in the hospitality industry has grown quickly in recent years. He said he expects to see continued fluctuations among the pool of private lenders.
"One thing I've noticed is a lot of that competition is struggling to actually get capital out, and part of the reason they're struggling to actually be able to make loans is they don't have the infrastructure to actually service these loans," he said. "They don't have the infrastructure to go underwrite and originate loans."
For all of HNN's discussion with Friedman, listen to the podcast above.