Hotel & Motel Management - December 27, 2007 - (Page 34) » BY EL A INE YE T ZER SIMON, SENIOR EDITOR Lending still a top concern for industry he conservative lending approach that characterized the last part of 2007 isn’t expected to change drastically in the short term. Arthur L. Buser Jr., managing director, president-lodging capital markets-Americas for Jones Lang LaSalle Hotels, said there certainly is going to be more lending activity in 2008, but it’s too soon to tell just how much. “Lenders get allocations of funds each year, and most have already loaned the 2007 funds,” he said. “They have no incentive to do more. The market has higher demand but the lenders are probably thinking, ‘Let’s wait until next year until we get our new allocations.’” The reduced number of active lenders in T the market is an issue that isn’t going away, according to Greg O’Stean, executive v.p. and managing director, hospitality, GE Real Estate. “Balance sheet lenders like GE Real Estate and insurance companies are Buser still funding good oppor- JLLH tunities,” O’Stean said. “However, most conduit shops have been on the sidelines since August, and it is anyone’s guess as to when they will return and to what level. The [commercial mortgage-backed securities] market in the near term will be significantly below the peak levels experienced in recent years.” The fact that lenders again are requiring recourse magnifies the lack of debt available in the market. “We expect that borrowers will experience tighter underwriting standards for the next 12 O’Stean to 36 months,” said Greg GE REAL ESTATE Friedman, senior v.p. of Specialty Finance Group. “Developers/owners that are unable to inject real equity and provide reasonable recourse will struggle to find financing in the current market.” These factors are expected to depress the number of transactions in 2008. esimon@questex.com http://www.MoodyNational.com http://www.MoodyNational.com
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