Hotel Finance Strategies in the Wake of COVID-19: Debt Restructuring; Utilizing PPP and Main Street Lending Program
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will discuss the options currently available to hotel operators and their lenders impacted by the COVID-19 economic and travel shutdown. The panel will discuss the complex issues presented with foreclosure or restructuring of distressed hotel loans. The panel will also address how new CARES Act loan programs--the Paycheck Protection Program (PPP) and the Main Street Lending Program--might facilitate new financing to enable operators to survive the shutdown and how they may fall short for hotel operators.
- Working out a hotel loan: issues unique to hotels; competing stakeholders
- Preserving the franchise
- Management company with exclusive rights, continuing control
- Licenses, permits, and contracts
- Covenant defaults
- Recourse obligations
- The Paycheck Protection Program: short-term relief, limited funds and hotel complexities
- The Main Street Lending Program
- Ability to upsize existing loan
- The federal government takes on 95% of repayment risk
- Favorable terms
- Unknown details
The panel will review these and other issues:
- What concerns particular to hotels (and their sponsors) must be addressed before proceeding with restructuring or foreclosure of a hotel loan?
- Are hotels eligible to participate in the Paycheck Protection Program? Is consent of the current lender required?
- How does the Main Street New Loan Facility differ from the Main Street Expanded Loan Facility?
- What is the process for applying for and closing a loan under one of the Main Street Lending Program facilities?
Joshua D. (Josh) Brock
Frost Brown Todd
Mr. Brock represents institutional lenders and borrowers in complex real estate transactions. He has represented... | Read More
Mr. Brock represents institutional lenders and borrowers in complex real estate transactions. He has represented lenders in closing CMBS and mezzanine loans across all major commercial asset classes. Mr. Brock’s transactional experience includes DST borrower structures, ground leases, condominium regimes, mortgage/mezzanine transactions, assorted tax credit/PILOT arrangements, master lease transactions and New York and Florida assignments. Mr. Brock has represented property owners on a large array of real estate transactions including acquisitions, sales and refinancings, with a focus on hotel properties. This experience includes publicly-traded hotel REITs, ground lease transactions, 1031 exchanges, mortgage and mezzanine loans, variable rate loans and mixed-use properties.Close
Ann Hambly, CRE
Founder & CEO
1st Service Solutions
Ms. Hambly has been involved in every aspect of the CMBS industry throughout her 35+ year career. She has been an... | Read More
Ms. Hambly has been involved in every aspect of the CMBS industry throughout her 35+ year career. She has been an intentionally integral part in shaping the CMBS industry since its inception. Ms. Hambly created from scratch and ran many large servicing shops before creating 1st Service Solutions in 2005 which has grown into what is now known as the preeminent CMBS Borrower Advocate practice. Ms. Hambly has been and continues to be highly involved in industry leadership as a featured keynote speaker at conferences across the country speaking on CMBS structure, CMBS workouts, assumptions, and hot topics in the general CRE industry.Close
Keith H. Mullen
Shackelford Bowen McKinley & Norton
Mr. Mullen’s expertise includes creating, implementing, and managing over 17 lending, distressed debt, and... | Read More
Mr. Mullen’s expertise includes creating, implementing, and managing over 17 lending, distressed debt, and commercial leasing programs--with the proven ability to improve the process and the product by using technology. In the hotel\hospitality sector, his practice spans all product types and ownership structures (including ground lease, tenant-in-common, and condominium structures), and includes representing construction lenders, terms lenders (and co-lenders), debt funds, loan originators and servicers, owners\borrowers\operators, and loan guarantors. He understands that as an operating business with a wide variety of service offerings, the hospitality sector is alive with competing interests, with each interest driven by a unique (and sometimes conflicting) set of goals and challenges.Close
Geoffrey M. White
Frost Brown Todd
Mr. White represents borrowers, developers, owners, investors, lenders, loan servicers, and managers in the financing,... | Read More
Mr. White represents borrowers, developers, owners, investors, lenders, loan servicers, and managers in the financing, workout, servicing, purchase, sale, development and management of commercial real estate properties. He has represented life insurance companies, CMBS loan originators, national banks and FHA-insured lenders in closing billions of dollars in loans in 41 states. Mr. White has also represented publicly traded REITs, national real estate investors and developers, and regional and local developers in closing billions of dollars of CMBS, mortgage REIT, mezzanine, life insurance company, national bank, FHA-insured, Fannie Mae DUS, and Freddie Mac loans in over 20 states. These loans have been for the new construction, purchase or refinancing of multifamily housing, hotels, offices, retail centers, medical offices, industrial properties, senior housing, nursing homes and assisted living facilities. Mr. White has also represented borrowers, special servicers, life insurance companies and FHA-insured lenders in connection with a multitude of servicing related matters for both distressed and performing assets. He previously served as the firm’s Real Estate Service Team LeaderClose