As a hotel owner, navigating the current capital markets can be challenging, especially with impending debt maturities and the tightening of borrowing conditions. However, there is a solution that can help you extract equity, pay off maturing loans, finance acquisitions, and enhance your internal rate of return (IRR): hotel sale leaseback financing. ZEL Capital Partners Hotel Sale Leaseback model offers a compelling path to fee ownership with a repurchase option, enabling you to regain control of your property in the future.
In the face of rising interest rates, increased borrowing costs, and stricter lending requirements, sale-leasebacks have emerged as a viable alternative to traditional financing. By leveraging this strategy, hotel owners can sell their property to an investor while simultaneously entering into a long-term lease agreement, typically spanning 20 years. This approach combines the benefits of real property sale and corporate financing, resulting in attractive cap rates that outperform corporate lending rates.
The advantages of hotel sale leaseback financing are manifold. Firstly, it allows you to unlock the value of your property, generating immediate cash flow that can be reinvested in your business. Whether you’re pursuing new product development, expansions, or other revenue-generating initiatives, this infusion of capital can propel your hotel’s growth trajectory.
Furthermore, by embracing sale leaseback financing, you retain access to your critical hotel facilities. This continuity ensures minimal disruption to your operations, allowing you to maintain the high standards of service expected by your guests. With ZEL Capital Partners Hotel Sale Leaseback model, you also have the option to finance future property improvement plans (PIPs) and amortize the associated costs into the lease payments over time, further enhancing the financial flexibility of your hotel.
The current market conditions make it an opportune time for hotel owners to explore sale-leasebacks. As inflation, GDP growth expectations, and the Federal Reserve’s actions impact corporate cash flow, traditional financing becomes more challenging. Sale leaseback financing provides a viable cure for these market woes, offering a lifeline to CFOs seeking new sources of capital for their hotels.
Moreover, the urgency to act now is driven by the potential depreciation of real estate values and the looming economic uncertainty. By capitalizing on the current market conditions, hotel owners can secure more favorable pricing and mitigate the risks of future interest rate hikes. Buyers and sellers alike are motivated to expedite deals, presenting an excellent opportunity to maximize your returns. Consider evaluating your entire hotel portfolio to identify multiple properties suitable for sale-leasebacks, as this can enhance pricing and generate greater interest from investors.
As experts in hotel sale leaseback financing, we urge you to seize this moment. ZEL Capital Partners offers a proven model that empowers hotel owners to unlock equity, pay off debts, pursue acquisitions, and achieve higher IRR. With our flexible repurchase option, you can regain control of your property when the time is right. Don’t let the current market challenges hinder your hotel’s potential—embrace hotel sale leaseback financing and pave the way for sustainable growth and financial success.
Jeff Cohen
Senior Vice President | ZEL Capital Partners
(480) 355-4392
[email protected]
