REAL ESTATE & HOSPITALITY
The Real Estate sector is facing headwinds due to higher interest rates and the significant increase in employees working from home. While conditions can vary widely depending on asset class, market, and sub-market, generally they are challenging: higher cap rates, tighter lending standards, more expensive financing and conservative LTVs, and higher operating costs. The office asset class has been most heavily impacted by the current environment, but other asset classes have been affected as well, including multifamily and hospitality.
The hospitality industry has recovered significantly from the depths of the COVID-19 pandemic, with many markets and segments having reached or exceeded 2019 RevPAR. However, the recovery has been driven by ADR growth as well as voracious domestic consumer demand for travel, as transient business travel and foreign tourist travel have not recovered to 2019 levels. Some segments are still struggling, such as full-service hotels in downtown business districts. Higher operating costs (labor, insurance and utility costs) have eroded margins, and labor shortages have left many properties struggling to recruit and retain employees, impacting guest satisfaction. Many properties have delayed needed PIPs and are now facing pressure from franchisors and guests to implement them. However, higher interest rates and construction costs, as well as tighter lending standards, have made it difficult for owners to finance these projects. Hospitality owners and management companies must adapt to a rapidly evolving landscape and address current challenges while satisfying their guests – these are the priorities for those seeking to thrive in the hospitality industry.
Our Range of Services Includes:
- Bankruptcy Advisory
- Fiduciary Services
- Financial Advisory (Workouts, Restructuring, Business Plan Analysis, Liquidity Management)
- Interim Management
- Lease Restructuring
- Litigation Support / Expert Testimony
- Note Sales
- Property Sales & Dispositions
- Tax Advisory Services
- Transaction Advisory Services (Appraisals, Due Diligence)
GH Real Estate & Hospitality 1-page Overview (Click to open)
