StackSource revamps Hotel Financing

Tim Milazzo
March 26, 2021

Since launching, StackSource has provided a great financing experience for several types of commercial real estate deals. We’ve closed loans in 30 states across the country already, and the loan sizes have varied from tiny (less than $500k) to mid-sized ($20–50 Million). Only recently have we had some real, reputable clients with deals larger than $50 Million in the pipeline, which is exciting and a testament to the process we’ve developed to gain maximum competition from financing sources efficiently.

But our deal-flow really hasn’t spanned every major commercial property type yet. We’re seeing and closing many, many multifamily financings. We’ve done our fair share of retail — both outparcels with a single unit (like a standalone Dollar Store) or strip centers with a longer roster of tenants. Over the last year we’ve arranged financing for an increasing number of medical office, traditional office, and industrial properties.

Hospitality (hotels, motels, and resorts) finance is another large chunk of this industry that we really haven’t cracked to date. And, to be fair, it’s been a historically bad market for hospitality real estate due to the pandemic.

But this is the year for hotels to either bounce back, or sell at a discount to new investors hoping they’ll bounce back later. Both scenarios mean hotel financing opportunities. So we’re gearing up to help hotel owners in a more meaningful way with our platform.

Starting today, when a user selects Hospitality as their asset class on the StackSource platform, they’ll have a more tailored experience that will ultimately result in a more accurate set of lender matches for hotel properties, and a more descriptive loan request memo for those lenders to review, automatically.

When underwriting hotel loans, banks and other lenders care about a few specific things that don’t show up while underwriting other property types:

1. The branding of the hotel — because this indicates the quality of the guest experience and drives demand. Some banks will lend to boutique hotels (not part of a national chain), and some will not. It’s a signal that can whittle down the lender list to the correct lenders.

2. Market demand for short-term stays — this is driven by location, and why people are visiting the area and need a hotel stay. There are national data partners that provide indications of market demand that will drive occupancy and rates, which are key to the lender’s underwriting.

3. Hospitality operations experience — you don’t just buy a hotel and then let the property sit there. Running an efficient operation and keeping up with the times is essential.

Lenders on our platform can now customize their loan request matching criteria by multiple new hospitality-specific options.

Hotel borrowers and capital providers alike will benefit from the more tailored experience and precise lender matches with this new functionality. Stay tuned for some upcoming hotel loan closings coming VERY soon!

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