Joint Venture Agreements in Today's Hotel Industry: Navigating New Realities With Restructuring and Rescue Capital

Description

In an era marked by economic complexities, the hotel industry faces a unique set of challenges. Higher interest rates, escalating construction costs, stringent brand requirements, fluctuating travel trends and changes in market demographics, particularly the challenges in central business districts, have created a landscape where traditional models of hotel ownership, development and management are no longer sufficient.

Joint ventures offer significant flexibility and can be tailored to the specific circumstances of the transaction and to the needs of the parties. Thus, real estate equity investments and joint ventures have become an increasingly important part of the investment strategy for hotel properties. The joint venture model for hotel acquisitions offers many benefits, including increased access to capital.

In the current market, there is a need for and access to rescue capital in critical situations. When structured properly, joint ventures can serve as a strategic tool to leverage strengths and mitigate risks. However, joint venture agreements and other related documents are very complex and fiercely negotiated. Real estate and finance counsel must understand all the pertinent issues to successfully evaluate and address economic issues when negotiating and structuring these agreements and hotel transactions.

Listen as our authoritative panel of real estate practitioners and advisers reviews vital legal issues in joint ventures for hotel acquisitions and development. The panel will focus on preferred return/promoted interest, carried interest, cash flow splits, risk allocations, guarantees, unwind provisions, and other major decisions.