NATIONAL REPORT—The ALIS Summer Update continued today with a session on lending, which provided further evidence that conditions continue to improve for the lodging industry.
The session, entitled “The Outlook from the Lenders—More Not Less,” was moderated by Robert Stiles, principal/managing director, Robert Douglas. The panel included Jeffrey Bucaro, SVP, Aries Capital, LLC; Warren de Haan, chief originations officer/managing director, Starwood Property Trust; and Mark Fluent, CRE Lending, Deutsche Bank.
When the participants recorded the first part of the series a few weeks ago, all agreed that it’s a great time to be a borrower. “I’d love to be a borrower,” said Bucaro. “The rates are as inexpensive as they’ve ever been.” Fluent added that there’s “tremendous cash flow” and “locked in long-term fixed rate is very attractive.”
In the second half of the discussion, which took place live today, the panelists noted that recent volatility in the market has caused a number of deals to be delayed and some have even fallen apart. But, de Haan noted, “As a balance sheet lender, I like this environment. It creates pause in the CMBS market, which has come back extremely powerfully over the last six months.”
The panelists agreed that everyone seems to be a little more cautious this time around. “There are signs from time to time of stretching,” Fluent said, but agreed that the industry has been more disciplined.
As for the current situation, Bucaro remarked,”If you didn’t already refinance, you missed the absolute bottom.” However, he said, it’s not the worst thing in the world because rates are still attractive. “It’s a great time to refinance.”