Hotel owners ask it before every acquisition and refinance: will the brand stay if the land is leased? Major flags operate on ground leases across the country. What matters is the paper — the term, the transfer language, and what happens to the franchise if the operator ever changes.
Hotels carry the highest cost of capital in real estate — which makes the spread between hotel yields and ground-lease pricing the widest in the business. Taking the land out of a hotel acquisition can cut the equity check dramatically while trailing income covers the rent from day one, and the leasehold loan that remains shows a debt yield lenders rarely see on hospitality. Operating history, brand, management agreement: all untouched.
Typically they review it during licensing or relicensing. What they look for — long remaining term, operator transferability, no fee mortgage that can foreclose out the operation — are exactly the features of our form.
PIP obligations live at the operating level, unchanged. If anything, the equity our purchase frees up is what funds the PIP without a mezzanine loan.
They coexist at different layers: the lease governs the land, the franchise governs the brand, and comfort letters align them for the lender. Standard hotel structuring.
Send the trailing 12 and the stack. We will show you the acquisition with land capital in it, and what it does to your equity and your lender's debt yield.
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