...Lenders Grow More Conservative: Hotel owners will encounter a more challenging debt financing environment during 2016. Lenders are responding to the broad repricing of risk (higher) across most debt capital markets by increasing interest rates and tightening underwriting standards for hotel loans. Less attractively priced hotel debt capital will pressure unit growth for lodging C-Corps and lead to more off-balance-sheet liabilities as the major hotel brands step in to support development. Hotel REITs looking to sell noncore properties (particularly limited service hotels) will regret not being more fleet footed. Known Unknowns Weigh on CMBS: Several issues are clouding the U.S. CMBS market outlook -- most are negatives that are well understood by lenders and investors, but challenging to handicap nonetheless. CBMS spreads have widened persistently and show few signs of stabilization, which is increasing the "warehouse" risk for conduit lenders. (Some hotel brokers have noted financing contingencies...
