In an article published by Commercial Property Executive on February 20, B.A. Spignardo discusses the lending environment for the hospitality market in 2019.
“With the dawn of a new year, one might expect lenders to be at the ready to fund loans and kick off the first quarter with a flurry of lending activity,” she states. “Do not, however, expect to see a burst of early-2019 financing secured by hospitality properties, construction or otherwise.”
One contributing factor is rising construction costs, which serve as a deterrent to lenders and developers seeking projects in the hospitality industry. Spignardo explains, “Lenders and developers will likely exercise a long-term view as to the length of construction projects and costs associated therewith; it is not likely projects will be funded with a quick commencement to construction early in 2019.”
“Although not loaded into the front end of 2019, expect to see steady lender interest in financing projects in the hospitality market as the year progresses,” she advises. “Expect lenders to carefully analyze potential projects and take a measured, marathon approach to the year, as the industry waits patiently to realize the effects of the partial government shutdown, rising construction costs and the steadfastness of Airbnb”
For the full article, click here.