An understanding of the market conditions under which a hospitality project will operate is critical to most major ownership, management, and development decisions. The parameters of the development of a project, operating strategies, and other issues depend largely on the market outlook. We will undertake a broad spectrum of analyses, ranging from preliminary verbal reports to full market studies that are suitable for presentations to prospective lenders or investors.
Evaluation of Operations
The principals of the firm have performed diagnostic reviews of the operations of a wide variety of hotels. These include extensive one-time studies of the entire operation or selected departments of a hotel.
We assist planners and architects in developing the fundamental layout and orientation of individual hotels or large multi-use projects. Often, the depth of our experience and knowledge of expected market conditions allows us to make important contributions in the planning process. Our work can have significant benefits in the planning of mixed-use projects and large integrated resorts, since the relationship of individual projects to other elements of these large developments can have far-reaching impacts.
We will analyze a hotel, or a portfolio of hotels, being considered for acquisition. Typically, this analysis includes an assessment of the competitive market, consideration of capital needs, and management and brand affiliation. Based on determined strategies, we will assess the development risk, project occupancies and average rates over a defined ownership period, and develop a revenue and expense operating proforma for the lodging asset(s).
The firm will undertake assignments concerned with the evaluation of attributes of one or more project sites. These studies may involve a search for suitable development sites, a comparative evaluation of several available sites, an analysis of a specific site, or similar tasks.
We offer unbiased analysis of the potential base and incremental impact on a branded hotel from the introduction of a hotel that is proposed to have the same brand or be a part of the same brand company.
Loan Due Diligence and Underwriting
We conduct due diligence and underwriting for hotel loans. Services include review of third-party reports, writing credit memorandums, and preparation of underwriting models.
We provide assistance to financial institutions, owners, developers, and landowners in formulating strategic plans for their individual or portfolio assets. These planning efforts may focus on asset disposition, long-term development, organizational context, operating plans, and other concerns. Typically, some market or operations analysis will be performed in support of strategic plans.
We provide hotel asset management services for owners. Our services are tailored to ownership strategies and the short- and long-term goals for the property.
Litigation Support Services
We provide market analysis, valuations, operations evaluations, estimates of lost income, and other services in support of litigation. We have appeared as expert witnesses in civil actions, tax appeals, and arbitrations.
The firm will assist owners in evaluating the returns available from a proposed development, addition, or renovation. Estimated cash flow will be reconciled with development costs, and a variety of simple and sophisticated measures of return can be prepared. While it is preferable to have cost estimates developed by an experienced cost engineer, the firm has a variety of sources that can be used to develop order-of-magnitude cost estimates.
Property Tax Appeals
We offer property tax appeal services for hotels, including determining if the hotel’s property tax assessment is at fair market value and, if warranted, appealing the case on behalf of the owner.
We will work with the lender and/or owner to formulate a realistic projection and to bring to light key issues (management contract, brand requirements, etc.) concerning the workout of a troubled asset. We will work alongside legal experts in the evaluation of various debt restructuring options and solutions.