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23 April 2021
See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on C-PACE Financing.

Hotel finance lawyer: Commercial PACE (C-PACE) Financing is now mainstream

Over the past five years, Commerical PACE (C-PACE) financing has gained wider acceptance, and moved from a novel technique to a mainstream practical solution for financing. For more background on what C-PACE financing is, why it can be attractive, why it is becoming more popular and how JMBM’s attorneys can help, see C-PACE Financing – Now an accepted tool for hotel lenders and borrowers.

Our lawyers are at the leading edge of this important new trend. And we think that sharing some of our client’s successes with C-PACE financing may help others evaluate this tool for their own needs. So this is one in a series of successful C-PACE financing closings.

David Sudeck of the Global Hospitality Group® at Jeffer, Mangels, Butler & Mitchell LLP recently worked with a C-PACE financing source to close a retroactive $6 million PACE loan for the 105-room Kimpton La Peer Hotel in West Hollywood, CA. The property includes a full-service restaurant, pool and rooftop deck.

la-peer-lobby-150x150

photo: lapeerhotel.com

Hotel: Kimpton La Peer
Location: West Hollywood, CA
Size of C-PACE Loan: $6 million

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20 February 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on C-PACE Financing.

Hotel finance lawyer: C-PACE Financing is now mainstream

About five years ago, my partner David Sudeck, a senior member of JMBM’s Global Hospitality Group®, spoke at a hotel industry conference about the attractive features of Commercial PACE (or C-PACE) financing as an innovative financing technique. David has extensive experience with virtually all kinds of real estate financing from senior debt to joint ventures. At the time, he had just finished working on a hotel financing that included components of a senior construction loan from a private lender, Mello Roos community facilities district financing, EB-5 financing, and C-PACE Financing. Few people in the audience at the conference had heard about Commercial PACE financing, and there were a lot of questions about its characteristics.

Over the past five years, C-PACE financing has gained wider acceptance, and moved from a novel or creative technique to a widely-accepted practical solution to financings. It has gained traction with both lenders and borrowers. But its gradual increasing use was accelerated by the COVID pandemic and resulting lockdowns, and near collapse in many segments of the hospitality industry. The accompanying deficiency of construction and other financing since March 2020, supercharged the importance and use of C-PACE Financing. Over the past few months alone, David Sudeck and his team have worked, on the lender and borrower-side of transactions, on more than a dozen Commercial PACE financing transactions. The largest that we have worked on, more than $40 million of C-PACE financing, closed just a few weeks ago.

At this point, most owners and developers are considering C-PACE financing as part of their capital stack for development, for renovation, and for rescue capital (more on this below). And more and more lenders have been approving C-PACE as a part of the capital stack. Why, you ask?

Why C-PACE financing can be attractive:

C-PACE financing takes the form of a voluntary tax assessment on real property, having the same features and priority as an ad valorem real property tax (typically paid only twice per year, when real property taxes are paid). Here are some of the features that may be negotiated which can make it attractive financing: CONTINUE READING →

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7 October 2016

Click here for the latest articles on EB-5 Financing. 

Los Angeles—The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP is pleased to announce the recent closing of two hotel deals for their clients, Great Wolf Resorts and Wurzak Hotel Group. Jim Butler, Chair of the Global Hospitality Group®, and David Sudeck, a senior member, led the transactions and associated EB-5 financing.

Great Wolf Resorts recently closed the purchase of property in LaGrange, Atlanta, for a resort that will include a 93,000 square foot water park, several restaurants, and 456 suites. Butler and Sudeck helped their client secure financing through the EB-5 Immigrant Investor Visa Program.

Another JMBM client, the Philadelphia-based Wurzak Hotel Group, recently purchased a property in downtown Fort Lauderdale, Florida, and is under construction on a 24-story, dual-branded hotel. The 323-room hotel project will include The Dalmar, a Starwood Tribute Portfolio, and an Element hotel, which will feature retail, meeting facilities, and a rooftop lounge. Butler and Sudeck assisted Wurzak in sourcing EB-5 financing for the project, as well as negotiating and closing the deal.

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Jonathan Falik, CEO of JF Capital Advisors, speaks with David Sudeck, senior member of JMBM’s Global Hospitality Group® at JMBM’s 2016 Meet the Money® – the national hotel finance and investment conference. They discuss the current hotel market, the availability of capital, and what lenders and capital providers are looking for.

A transcript follows the video. See other videos in this series on the Jeffer Mangels YouTube channel.

David Sudeck: We’re at the 26th Annual Meet the Money Conference. I’m here with Jonathan Falik, CEO and Founder of JF Capital Advisors. Welcome.

Jonathan Falik: Thank you for having me.

David Sudeck: You’ve been a mainstay at Meet the Money® – we appreciate that, by the way.

Jonathan Falik: Well, it’s one of my favorite conferences.

David Sudeck: What’s the temperament like in terms of the marketplace?

Jonathan Falik: People are cautious. Most seem optimistic, but are cautious and are in a learning mode. Everyone’s trying to figure out who’s saying what and who’s thinking what – which is interesting because normally people in our industry think they know everything.

David Sudeck: What are you seeing in the marketplace in general? Let’s talk about the cycle. CONTINUE READING →

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21 September 2015

Click here for the latest articles on EB-5 Financing. 

The Global Hospitality Group® is best known for its expertise in connection with hotels and resorts. We also have an active restaurant practice, and like a hotel, a restaurant is an operating business integrally intertwined with special purpose real estate. We frequently advise restaurant owners and operators on labor and employment, ADA, management, and finance and licensing issues, and we have a particular expertise relating to celebrity chef deals.

Senior Global Hospitality Group® member David Sudeck recently participated in a roundtable discussion about the food and beverage industry in Los Angeles, published in the Los Angeles Business Journal. The following discussion about licensing issues, EB-5 and crowdfunding investment in restaurant projects, gift card and loyalty programs and tax planning strategies is based on the roundtable and includes some clarifications and updates.

 

The Food & Beverage Industry in Los Angeles: A Roundtable Discussion
Supplement to the Los Angeles Business Journal

The food and beverage industry is unique in many ways. And here in Los Angeles, where we have some of the best dining and food-for-purchase options in the nation, there may be an even more finely tuned set of rules for success. Stir in an unpredictable economy and you’ve got a sector of Southern California business that continues to evolve faster than most. To make some sense of this exciting and unpredictable realm, the Los Angeles Business Journal turned to some of the leading experts in the region – from the financial, legal and business perspectives – to get their diverse insights and assessments regarding the current state of the industry that Angelenos most certainly couldn’t live without!

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11 January 2015

Click here for the latest articles on EB-5 Financing. 

 

JMBM is a Platinum Sponsor of the EB-5 Investors Conference in Las Vegas on January 17, 2015 and will moderate and talk about EB-5 for hotel development

JMBM’s Global Hospitality Group® is pleased to be a Platinum sponsor of the upcoming EB-5 Investors Conference at the Wynn Encore Resort in Las Vegas on January 17, 2015. This is one of the premier conferences on this subject in the entire United States.

Partner, Jonathan Bloch and I will moderate and participate in a panel on Hotel Development – Jonathan as a speaker, and myself as a moderator. In addition, JMBM’s Global Hospitality Group® Vice Chairman, Guy Maisnik and Partner, David Sudeck will be attending to meet with potential clients and friend to help explore this opportunity.

Our panel on EB-5 for Hotel Development will be from 11:30 am to 12:30 pm on Saturday, January 17, 2015. We hope you will join us for our session and reach out to us if you would like to get together to explore the EB-5 financing opportunity. We are able to help qualified premier developers source low-cost EB-5 financing for their project.

Why EB-5 and this Conference?

EB-5 financing is being used widely by some of the largest owners of hotels and restaurants, and we will be discussing how developers are taking advantage of this capital. EB-5 financing has provided developers with low-cost, non-recourse, five to six year financing for construction and development of new projects.

Whether you are new to EB-5 financing or have used it in the past, this one-day conference has something for everyone. CONTINUE READING →

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www.MeetTheMoney.com
11 May 2013

Meet the Money® is one of the best places in the country for meeting the Who’s Who of the hotel world, getting financing and transactions done and catching up on the latest strategies and approaches. This year’s conference was held at the Sheraton LAX, May 6-8, 2013 and was attended by approximately 350 hotel industry leaders. Here’s a quick take on the mood of the conference and some information about
Mood of the hotel industry: optimism and sustainability of recovery

JMBM wrapped up its 23rd annual hotel conference this week amidst the strongest optimism for the hotel industry that hotel experts have seen for six years. The consensus was there is a lot of blue sky ahead. Some think the good times will only last for a couple of years, but many see a good run for at least 5 years!

Everyone at Meet the Money® seemed to be fairly comfortable that the recovery has significant sustainability, because the debt and equity markets have not gotten too frothy, and new supply has been very restrained.

Mark Woodworth of PKF summarized it well after presenting industry fundamentals by saying: “It is a great time to be in the hotel business!”
And Vail Brown gave the STR forecast that the outlook of continuing improvements is “Steady as she goes.”

Greg Hartmann of JLL sounded a slightly more cautious note. He agrees that everything looks pretty good for the next couple of years, but questions how long it can last, and suggests that investors might consider selling in the next year and a half to two years.

What inning are we in? Almost every panel gave its views, with the biggest consensus being that we are in the 4th or 5th inning — still early in the ballgame. John Alderson of Westfield thinks that the shopping center owners now getting active in adding hotels to their malls are way behind the rest of the industry (2nd inning?) and are likely to have their games continue as they implement strategic plans.

Hotel Industry Presentations from Meet the Money® 2013

Meet the Money® 2013 was buzzing with action and great information. We have decided to release some of the presentations for free download. Select presentations from Meet the Money® 2013 (described below) and are now available at www.HotelLawyer.com. Click on “RESOURCE CENTER” and then “Hotel Industry Presentations.”

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8 March 2013

JMBM’s Global Hospitality Group® announces publication of the How to Buy a Hotel Handbook.

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) today announced the release of the How to Buy a Hotel Handbook, third in the “We Wrote the Book™” series of handbooks published by the Group’s hotel lawyers.

Jim Butler is the Chairman of JMBM’s Global Hospitality Group®. The How to Buy a Hotel Handbook is based on the experience Jim’s team has gained from more than $87 billion of hotel transactions involving more than 1,300 hotels all over the world. The Handbook provides a detailed overview of the hotel acquisition process, a thorough due diligence checklist, and informative articles that address some of the most important questions that arise when buying or selling a hotel.

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30 January 2013

Click here for the latest articles on ADA Compliance and Defense.

 

Hotel Lawyer talking about California’s new law aimed at ADA litigation reform.

ADA litigation claims have skyrocketed. Since January 2005, 16,530 ADA lawsuits — lawsuits alleging violations of the Americans with Disabilities Act (“ADA”) — have been filed in federal courts across the country. Even more have been filed in state courts.

In the article below, two senior members of our Global Hospitality Group® talk about a new law passed in California with the goal of reducing abusive ADA litigation. Parts of this law became effective in September 2012, and the rest of it became effective January 1, 2013. Marty Orlick, Chair of JMBM’s ADA Compliance & Defense Group, and David Sudeck, hotel and timeshare lawyer, look at some of the key provisions of this new law and provide their observations about their impact.

Marty and David frequently work together to advise hotel and timeshare owners and operators in connection with Federal and State accessibility law compliance. In this article, they bring California business owners some insight into the likely effectiveness a well-intentioned new law intended to curb abusive ADA litigation.

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9 November 2012

Representations and warranties in the documentation of a hotel purchase and sale agreement (or agreement for purchase and sale of any type of hospitality property): What is the value of the seller’s representations and warranties? When does it matter?.

Hotels, restaurants, resorts, vacation ownership projects, spas, golf courses and other similar hospitality properties are different than most real estate. They involve operating businesses that are integrally intertwined with special purpose real estate.

So the documentation to buy or sell such a property (and business) needs to be different than that used for other commercial real estate. One of the areas that is most apparent is in the seller’s representation and warranties.

The article below is by hotel and timeshare lawyer David Sudeck, a senior member of JMBM’s Global Hospitality Group®, and someone very experienced in the purchase and sale of hotels, restaurants, resorts, vacation ownership projects, spas, golf courses and other similar hospitality properties. In a recent article, David wrote about representations and warranties in a purchase and sale agreement — what they are, what areas they cover, and what you want to get in a typical deal.

In this article, he writes about the value of these representations and warranties, hurdles to enforcing them and common terms used today.

This article is one of a series of insights that will be published initially as articles on the Hotel Law Blog at www.HotelLawyer.com and then they will be assembled into the HOW TO BUY A HOTEL handbook for our “We wrote the book™” series, much like the HMA Handbook and the Lenders Handbook for Troubled Hotels (see Resource Center at HotelLawyer.com for free copies).

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Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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