| The latest cycle is unlike any since the Great Depression, says Prism Hotels & Resorts founder Steve Van, though he made sure to remind everyone the market is cyclical. Couple that with the money lent on hotels, and disaster is looming for the hospitality industry. But for Steve, business is booming. His company specializes in turning around distressed hotels for lenders and CMBS special servicers. Since 2000, his firm and its affiliated companies have been selected to manage 175 defaulted hotels and acted as a US Bankruptcy Court appointed receiver 75 times. He spoke yesterday at a CREW Dallas luncheon at the Park City Club. | |
| CMBS special servicers will be taking hotels back, Steve predicts. There are not a lot of transactions right now because no one is willing to take a loss yet. “Back in RTC days, they were willing to sell properties for 17 cents on the dollar.” However, the worse is coming for borrowers because extend-and-pretend is still practiced in the hotel market. Hotels are an operating business, with about 40% for real estate and 60% for salaries: “You can avoid taxes, deferred maintenance, but come Friday, you can't avoid payroll. More than half of hotel loans are floating right now … we're going to see lots of distressed real estate that will provide lots of opportunity.” |
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