STATE COLLEGE, PA—Shaner Hotel Group (SHG) has recently formed the Shaner Hospitality Finance LLC, a REIT that will provide equity and/or debt for a wide array of hotel financing needs, including funding for PIPS, refinancing, purchasing existing loans and preferred equity infusions for acquisitions.
“This is our third hotel financing vehicle,” Lance Shaner, chairman and CEO of SHG, said in a statement. “Each has been tailored to fill a gap to meet the hotel industry’s specific financing needs at the time.”
Shaner noted that the hotel industry remains in a credit crunch with lenders remaining largely on the sidelines and a scarcity of new equity. “There is a significant number of quality, capital-starved hotels that with adequate funding can not only survive, but thrive. However, they need to restructure their capital stack, which often is a complex process that requires in-depth understanding of the hotel industry not found at most conventional financing firms.
“We believe there is a unique niche for a funding source that has a comprehensive understanding of the industry and financing needs from the owner’s perspective. We have the hospitality expertise to create solutions that less experienced finance organizations often do not see. Our company currently owns and operates 40 hotels and has been involved in more than 80 hotels over the past 30 years. We bring that hands-on, experienced perspective to hotel financing. We expect significant demand for our program,” Shaner noted, “and have the capacity to expand the platform as market conditions warrant.”
“With our in-depth experience, we can look at a situation and structure a deal that works for the owner,” Plato Ghinos, president of Shaner Hospitality Finance LLC, said in a statement. “We are not pursing ‘loan-to-own’ programs.” Mr. Ghinos added, “Our goal is to place the company’s initial $100 million capitalization within 12 months.”
Shaner Hospitality Finance LLC will focus primarily on small to mid-sized hotel companies, which have financing needs that are not served by lending institutions. Hotels must be well located and carry a premium, full-service or select-service flag. Financing range is between $3 million and $50 million and is available for both individual properties and portfolios. The company will likely concentrate primarily in the eastern half of the U.S.