Articles Posted in Hotel Finance − Hotel Debt & Hotel Equity

Published on: May 22, 2012

Successful joint ventures for hotel development, acquisition and financing

By Jim Butler and the Global Hospitality Group®

22 May 2012

At JMBM’s recent hotel finance conference in Los Angeles, a panel of experts talked about how well joint ventures are working to provide financing for hotel development and acquisitions.

The hotel joint venture experts

The Joint Venture Panel from Meet the Money® 2012 featured 5 veteran hotel investors and operating partners, and was moderated by Guy Maisnik, hotel lawyer and Vice Chair of JMBM’s Global Hospitality Group®. The panelists were:

Picture of Guy Maisnik Guy Maisnik, Vice Chair, JMBM’s Global Hospitality Group® works extensively on hotel joint ventures and financings, as well as acquisitions.

Mark Burden, CEO, Rim Hospitality
Lamont Meek, SVP and COO, Circa Capital
Rick Frank, SVP Hospitality, Behringer Harvard
Jonathan Martin, VP, AEW Capital Management
Kam Babaoff, Managing Director, Ensemble Hotel Partners

Each of these participants has a long history of investing in and operating hotels, and they represent the spectrum of views currently prevailing in the industry. While each has been successful, each has taken a different road to achieve success. The individual strategies and approaches of each stands out, as does the talent and vision necessary to navigate some of the toughest years in the hotel industry.

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Published on: March 13, 2012

5 Things to remember when buying hotel notes

By Jim Butler and the Global Hospitality Group®

13 March 2012

Hotel investment through buying hotel notes As the economy and hotel fundamentals continue to improve, hotel note purchase opportunities will be one of the most attractive hotel investments for savvy investors.

My partner and Vice Chair of our Global Hospitality Group®, Guy Maisnik, has been working a lot on note purchases lately, and I asked him to share some insights with us, which he graciously consented to do with his article today.

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Published on: October 25, 2011

Chinese investment in U.S. hotels: What the real estate professionals want to know

By Jim Butler and the Global Hospitality Group®

25 October 2011

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On Friday, October 21, 2011 I did a Q&A interview with the National Real Estate Bisnow about Chinese investment in U.S. hotels. Here is the full Question & Answer exchange, a portion of which appeared in the Biznow article.

There’s been an explosion of Chinese investment in the US, especially real estate. And many people believe it will surpass the Japanese investment of the late ’80s (estimated to have exceeded $120B).

There’s been an explosion of Chinese investment in US real estate. Who’s investing and where, and how much investment do you expect in 2011?

The increasing wave of Chinese investment in the U.S. is being fueled by the Chinese government (generally acting through construction companies, banks and other intermediary companies) and an exploding class of wealthy Chinese. The top .05% wealthiest Chinese have investible funds of more than $2.7 trillion, and there is a rapidly growing class of billionaires and more than 800,000 millionaires. Plus there is a huge rising middle class looking to travel and enjoy life.

Of course, in addition to Mainland China there are the Chinese in Taiwan, and everywhere else such as Hong Kong, Singapore, and Indonesia.

A recent Merchants Bank report estimates that rich Chinese individuals — those with assets of more than 10 million yuan — have about 3.6 trillion yuan ($564 billion) invested overseas. No reliable numbers are available for total Chinese foreign investment or Chinese investment in the United States. The investors are largely staying under the radar to avoid publicity and possible adverse reactions, and there seems to be no means to track the investments and get an aggregate investment number.

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Published on: August 31, 2011

Hotel Lending Lawyer: What every hotel lender needs to know about hotel due diligence

By Jim Butler and the Global Hospitality Group®

31 August 2011

Hotel Lenders: Do you know how due diligence for hotel lending differs from due diligence for other commercial real estate lending? More expertise, more time, more resources.

We have seen far too many hotel lenders “who don’t know what they don’t know” when underwriting a hotel loan, but then get a very expensive education post foreclosure. The due diligence required in hotel lending is far more intensive than for any other kind of real estate lending and requires far more expertise. The article below by my partner Guy Maisnik gives a few examples.

If you would like a refresher as to why hotel lending is different from other kinds of real estate lending, you may want to refer to (see, Why hotel lending is different and 8 pitfalls of hotel lending and how to avoid them).

Please see the links at the end of this article for other articles in the “What every hotel lender needs to know” series.

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Published on: August 24, 2011

Hotel Lending Lawyer: What every hotel lender needs to know about Cash Controls

By Jim Butler and the Global Hospitality Group®

24 August 2011

Hotel Lenders: Will you control the revenues of your hotel after foreclosure? Are you sure? What could go wrong? A lot can go wrong with lender expectations in a hotel loan unless the hotel loan documents are prepared by knowledgeable hotel lending lawyers.

In today’s blog post, Guy Maisnik highlights the importance of the hotel lender keeping control over revenues post foreclosure, and explains why it doesn’t always happen.

Please see the links at the end of this article for other articles in the “What every hotel lender needs to know” series.

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Published on: August 18, 2011

Hotel Lending Lawyer: What every hotel lender needs to know about SNDAs

By Jim Butler and the Global Hospitality Group®

18 August 2011

Hotel Lenders: What should every hotel lender consider in the SNDA before making a hotel loan? Here’s what to look for.

In today’s blog, my partner Guy Maisnik discusses the importance of something most lenders do not seem to adequately understand (until it is too late) and which often ensnares the lender when the loan gets in trouble – the Subordination, Non-Disturbance and Attornment Agreement or “SNDA“.

Please see the links at the end of this article for other articles in the “What every hotel lender needs to know” series.

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Published on: August 17, 2011

Hotel Lending Lawyer: What every hotel lender needs to know about HMAs and hotel franchise agreements

By Jim Butler and the Global Hospitality Group®

17 August 2011

Tips from the Hotel Lending Lawyer: Hotel loan problems and hotel loan document issues are best dealt with at the loan origination. Do you know these fundamentals about your hotel loan documents dealing with hotel management agreements (HMAs) and hotel franchise agreements? There is a long list of things every hotel lender should take into account before making a loan so that it will be protected when a default occurs — much less a foreclosure. But few considerations are as important as dealing with issues raised by HMAs and hotel franchises.

Over the years, we have counseled hotel developers, owners and lenders as they try to fix bad hotel deals and repair bad hotels loans. Often, their problems could have been avoided if experienced hotel advisors had reviewed the necessary documents with a practiced eye, connecting the dots and filling in the blanks before the loan was underwritten.

Hotel lending experience is the key

Lenders need hotel-specific experience — not just real estate experience — because, as my partner Guy Maisnik writes in his article below, “You don’t know what you don’t know.” And what you don’t know can cost you a bundle.

Because a hotel’s operating business is inextricably intertwined with single-purpose real estate, the borrower’s financial obligations are exceedingly complex. We have written other blogs about why hotel lending is different from other kinds of real estate lending, that you may want to read (see, Why hotel lending is different and 8 pitfalls of hotel lending and how to avoid them).

Guy has more than three decades experience in hotel and commercial real estate finance and has recently assisted 3 major lenders in revising and structuring their hotel lending programs and documentation, including their hotel construction lending. In this eye-opening series of articles, Guy discusses how hotel lenders often find unpleasant surprises with hotel loans when they don’t get experienced hotel counsel to prepare their loan documents. And real estate lending experience is not hotel lending experience!

Please see the links at the end of this article for other articles in the “What every hotel lender needs to know” series.

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Published on: June 1, 2011

Hotel Lawyer with the Executive Roundtable results.

By Jim Butler and the Global Hospitality Group®

01 June 2011

Debt is returning, equity is out looking, and we’ve passed the bottom of the trough. Why now is the time to purchase a hotel.

We promised to let you know when Hotel Business® published its coverage of its 2011 Executive Roundtable–Capital Ideas: Financing Solutions For Opportunistic Dealmakers that took place on May 2, 2011 in Los Angeles prior to Meet the Money®. The current issue of Hotel Business® just hit my mail box and the articles covering the Executive Roundtable and Meet the Money® provide some thoughtful reading.

If you do not know why now is the time to invest in a hotel, you will want to read these articles!

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Published on: April 19, 2011

Hotel Lawyer: The hotel transaction market is heating up!

By Jim Butler and the Global Hospitality Group®

19 April 2011

The transaction market is heating up, and I am still getting calls and comments about my interview with Eric Stoessel in the National Real Estate Investor last month, where we discussed how the hotel transaction market is poised for a big turnaround.

I am also getting calls about Meet the Money®, the hotel finance conference that will take place in two weeks in Los Angeles. Registrants want to know: will debt and equity players be there? (The answer is, yes!)

But, first things first.

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Published on: January 8, 2011

Hotel Lawyer: So,You Think You Want to Buy a Hotel?

By Jim Butler and the Global Hospitality Group®

8 January 2011

Hotel Lawyer with advice for 2011: Hotel Investors, take note!

Like it or not, the stage is now set. This is the time. The year 2011 will present one of the greatest hotel buying opportunities for many years to come. And if you are not buying hotels this year, you will miss the window created by one of the biggest economic downturns in American history. What are the key indicators as to why this is a great time to by a hotel? And is price alone enough to justify the purchase, or are there other factors you need to think about? If the market is heading north, can you still make a bad purchase?

Hotel Lawyer Guy Maisnik, Vice Chairman of JMBM’s Global Hospitality Group®, who was the lead attorney for the Receiver in the recent sale of the Sheraton Universal Hotel, answers these questions and more.

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Jim Butler

Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion.
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Robert Braun

Robert Braun is a partner in JMBM's Corporate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents owners in both transactional and operational issues. He advises clients with respect to business formation, financing, mergers and acquisitions, venture capital financing, joint ventures and strategic partnerships. He has represented hotel owners in the negotiation of several hundred management agreements, as well as spa management and franchise agreements. Bob also advises hotel owners regarding telecommunications, software, internet, e-commerce, data processing and outsourcing agreements. To read Bob's articles, go to www.HotelLawBlog.com and select "Management Agreements." For more information, please contact Bob Braun at 310.785.5331 or rbraun@jmbm.com.

Marta Fernandez

Marta Fernandez is a partner in JMBM's Employment and Labor Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. As a management labor lawyer with more than 20 years of experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB. She defends employers in administrative and litigation claims, such as employee claims of sexual harassment and discrimination and counsels clients in preventative strategies such as executive training, arbitration enforcement, and policies and procedures. To read Marta's articles, go to www.HotelLawBlog.com and select "Labor & Employment." For more information, please contact Marta Fernandez at 310.201.3534 or at mfernandez@jmbm.com.

Guy Maisnik

Guy Maisnik is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Guy's deep and broad transactional practice includes complex real estate finance and venture capital transactions, including project finance, commercial finance, leveraged leasing and real estate acquisitions. He assists clients with development, leasing and disposition, loan portfolio acquisitions, loan and debt restructure, workouts and real estate exchanges. Go to www.HotelLawBlog.com for current information in these areas. For more information, please contact Guy Maisnik at 310.201.3588 or mgm@jmbm.com.

David Sudeck

David Sudeck is a Partner in JMBM's Real Estate Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. David has significant experience in the vacation ownership arena, focusing on the formation and registration of condominiums, timeshares and fractional interest regimes. He negotiates hotel, spa and restaurant management agreements, and assists client in the development, acquisition, sale and leasing of hotels, golf courses and restaurants. For David's take on current issues in the timeshare arena, go to www.HotelLawBlog.com and click on the topic, "Timeshare." For more information, please contact David Sudeck at 310.201.3518 or dsudeck @jmbm.com.

Robert Kaplan

Robert Kaplan is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents lenders, special servicers, hard money lenders, community banks, national banking associations, distressed debt investors, and equity investors, positioning them for the best possible outcome by acting expeditiously to preserve value and increase cash flow. His industry experience and his knowledge of the current capital markets -- where distressed assets often include complex deal structures and securitized loans -- allows him to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, he is a vigorous and effective advocate for his clients. Bob represented the securitized lender in the Chapter 11 bankruptcy case filed by the Clift Hotel in San Francisco, and in the subsequent negotiations and successful sale of the loan to a third party. The lender -- acting by and through GMAC Commercial Mortgage Corporation as special servicer -- was the holder of a $60 million loan secured by a Deed of Trust on the Clift Hotel. He has also served as counsel to CapMark, J.E. Robert Company, Inc., AMRESCO Management Inc. and Midland Loan Servicer in their capacity as special servicers on troubled hotel loans in CMBS pools. For more information, contact Robert Kaplan at 415.984.9673 or rkaplan@jmbm.com.

Martin Orlick

Martin Orlick is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Marty specializes in representing hospitality industry clients in Americans With Disabilities Act (ADA) compliance and defense. He has represented more than 500 businesses in ADA issues, many of them hotels and restaurants, as well as hotel mixed-use properties. Marty is a member of the American College of Real Estate Lawyers (ACREL) and a frequent speaker on the ADA and other topics. To read Marty's articles, go to www.HotelLawBlog.comand select "ADA." For more information, please contact Marty Orlick at 415.984.9667 or morlick@jmbm.com.

Scott Brink

Scott Brink is a senior member of JMBM's Global Hospitality Group® and a partner in JMBM's Labor & Employment Law Department. Scott is a management labor lawyer with more than two decades of experience representing employers in all aspects of labor relations and employment law including union prevention, collective bargaining negotiations, defense of unfair labor practice charges before the NLRB, wrongful discharge litigation, individual and class action employment discrimination and wage-and-hour claims, sexual-harassment litigation, arbitrations, personnel policies, California wage and hour law, and employee discipline and discharge. An experienced trial attorney, Scott has litigated a number of high-profile and complex cases involving a wide range of labor and employment law matters. For more information, contact Scott Brink at RSB@jmbm.com or 310.785.5365.

Travis Gemoets

Travis Gemoets is an experienced trial attorney and represents management in all facets of labor and employment law, including wage/hour class actions, claims of discrimination, harassment, wrongful termination, trade secrets and unfair competition, union/management relations and workplace violence. He is a member of JMBM's Global Hospitality Group(r), in which capacity he negotiates union contracts and resolves labor disputes throughout the country, defends class action claims, develops strategies for the mass onboarding and separation of employees, and recommends proactive changes to employers' policies and practices in order to minimize potential liability risks. Reach him at 310.785.5387 or tgemoets@jmbm.com.

Mark S. Adams

Mark S. Adams is an experienced trial lawyer and a member of JMBM's Global Hospitality Group® and Chinese Investment Group™. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark's trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California's annual 50 largest jury verdicts in the same year. Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949. 623.7230 or markadams@jmbm.com.

Bennett Young

Bennett Young is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. His clients include lenders, financial institutions, secured and unsecured creditors, distressed investment funds, businesses, receivers, special servicers and creditors' committees. Ben represented the owner of a partially completed multi-billion dollar resort property in the restructuring of its finances and has represented lenders to hotels and casinos. For more information, contact Ben Young at 415.984.9626 or byoung@jmbm.com

Sheri Bonstelle

Sheri Bonstelle is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. She represents owners and developers in land use, zoning, environmental, litigation and construction matters. She manages all aspects of the entitlement process, including representing clients before local and state agencies, commissions and councils. Sheri also represents clients in a variety of land use and real estate litigation matters in state and federal courts, including cases arising under CEQA and other environmental laws. Her hotel experience includes handling the adaptive reuse of an historic office building as a luxury boutique hotel. For more information, please contact Sheri Bonstelle at 310.712.6847 or SBonstelle@jmbm.com.

Kevin McDonnell

Kevin McDonnell is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. Kevin represents developers and owners of hotels in a broad range of land use and zoning issues including entitlements, code enforcement, easements and parking requirements, as well as related Parcel Map and Tract Map subdivision issues. His hospitality experience includes hotels, condo-hotels and mixed-use projects. A registered Civil Engineer and Structural Engineer in California, and a former building official for the City of Los Angeles, Kevin brings unique experience and insight in Zoning and Building Code applications and Code Enforcement issues. For more information, please contact Kevin McDonnell at 310.201.3590 or kkm@jmbm.com.

Jamie Ogden

Jamie Ogden is a tax lawyer at Jeffer Mangels Butler & Mitchell LLP. He advises individuals and businesses on a range of tax planning, tax controversy and estate planning matters. Jamie’s experience includes all tax aspects with respect to the hospitality industry, including acquisitions and dispositions (including Section 1031 exchanges), financing and management agreements. He also serves as lead tax counsel on M&A transactions, financing, internal corporate restructurings and deferred compensation matters. Jamie also works frequently with litigators on the tax aspects of litigation, judgments and settlements. Jamie has extensive experience with foreign compliance matters, including each variation of the IRS amnesty programs. In addition to his experience in private practice, Jamie also brings several years of service from both state and federal government. For more information, contact Jamie at JOgden@jmbm.com or 310.201.3510.

Wei Deng

Wei Deng is General Counsel of Bosen American Capital, Inc. where in addition to his legal duties, he is responsible for sourcing, evaluating and proposing United States investment opportunities to the company. Wei was previously with JMBM, where he focused on transactional and litigation matters.

Jay Thompson

Jay Thompson has extensive experience representing private companies, business owners, family offices and investors in mergers and acquisitions, private equity and venture capital transactions and private securities offerings. Jay serves as general counsel to many of his clients, their management, and board of directors, helping to shape and execute their business strategies, facilitate growth and liquidity, as well as to advise them on day-to-day legal and other strategic issues. He is known for his practical approach to business issues. Contact Jay at JThompson@jmbm.com or 949.623.7258

Marianne Martin

Marianne Martin has nearly fifteen years of experience advising clients on a variety of commercial, financing, bankruptcy, restructuring and M&A matters, with a particular niche dealing with distressed and/or turnaround situations. Her clients frequently include private equity and hedge funds, independent sponsors, family offices, public and private corporations, financial institutions and banks, healthcare-related companies, municipalities and venture capital funds. She has represented clients in various capacities, including as borrowers/debtors, lenders, acquirers, and agents/trustees in negotiating and documenting complex commercial transactions, out-of-court restructuring transactions and advising on purchasing considerations in secondary market debt transactions. Contact Marianne at MMartin@jmbm.com or 310.201.3531

Trevor Countryman

Trevor Countryman is an associate in the firm's Real Estate Department. He advises clients in all aspects of real estate transactions including property acquisitions and dispositions, financing, leasing, development and construction. Trevor's clients range from large funds to individual developers and opportunistic investors, engaged in deals involving office, retail, multi-family, single-family, mixed-use and hotel properties. Contact Trevor Countryman at 310.201.3546 or TCountryman@jmbm.com.

Vanessa Han

Vanessa Han is an associate in JMBM's Corporate group. Vanessa can be reached at VHan@jmbm.com or 310.785.5383

Vince Farhat

Vince Farhat is Chair of JMBM's White Collar Defense and Investigations practice. Vince has extensive jury trial experience and focuses his practice on representing companies and individuals in criminal and civil investigations and prosecutions by government enforcement agencies, as well as complex federal litigation. He also advises companies in connection with complex and sensitive internal investigations. Prior to joining JMBM, Vince served as an assistant United States attorney in the Major Frauds Section of the U.S. Attorney's Office for the Central District of California. Contact Vince Farhat at 310.785.5382 or VFarhat@jmbm.com.

Sarah G. Hartman

Sarah G. Hartman is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Sarah is an experienced litigator who advises and represents clients through all aspects of litigation, from inception through trial and appeal. She advises and represents clients in the hospitality industry, including the termination of hotel management agreements and franchise agreements. Sarah also advises and represents clients on women's health technology issues, intellectual property matters, and complex commercial disputes, including breach of fiduciary duty, fraud, breach of contract, unfair competition, products liability, employment litigation, class action defense, false advertising and other complex financial disputes. Contact Sarah Hartman at 949.623.7243 or SGHartman@jmbm.com.

Michael H. Strub, Jr.

Michael H. Strub, Jr. is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. He is a highly skilled trial and appellate attorney who has handled high-stakes, complex commercial and business cases for 30 years including disputes arising out of hotel construction, lending, and bankruptcy. In addition, he has represented plaintiffs and defendants in business and commercial disputes in a variety of areas. Contact Michael H. Strub, Jr. at 949.623.7233 or MStrub@jmbm.com.

Ask the Hotel Lawyer™ is a quarterly column that I write for JMBM's Global Hospitality Advisor®. If you have a question you would like to submit to Ask the Hotel Lawyer™ please use the comments box below. While your question may not be of sufficient general interest for the column, I will try to respond to you individually if you leave your contact information below.
Jim Butler.