News for the Hospitality Executive
February 1, 2011 – Virginia, Beach, VA -- An affiliate of Afton Hospitality Management was recently engaged by a North Carolina lender to manage the Colonial Inn Motel in Nags Head following foreclosure. During the past year Afton has been hired by local and national lenders to consult regarding disposition strategies and to oversee management for more than a dozen mid-Atlantic hotels that defaulted on their mortgages.
Afton Hospitality, which was formed in early 2010 through a merger between Denton Hospitality and Afton Real Estate Investments, has quickly become recognized as a regional resource for lenders who are struggling with troubled commercial hotel mortgages. Afton has worked with a large cross-section of lenders, including community banks in Hampton Roads and one of the largest CMBS (commercial mortgage backed securities) special servicers in the nation, all of whom face similar challenges. “Many lenders are looking for solutions to issues in a complex industry and we are in a unique position due to our strong hotel lending background and franchise community contacts to add significant value,” says Timothy Stiffler, president of Afton. Stiffler was a commercial real estate lender specializing in hospitality finance who became a hotel and resort owner and operator in the 1990s. He sold that company in 2008 and shortly thereafter formed Afton. Stiffler said, “We understand the issues from the perspective of a lender, owner and operator.”
The hospitality industry has been hard-hit by the recession. As of January, 2011 approximately 15% of CMBS hotel loans (nearly 20% when measured in dollars) were delinquent at least 60 days. This translates to approximately $13 billion of seriously troubled hotel loans. Those figures do not include balance sheet loans with local and regional lenders - which many industry observers predict have an equal (if not higher) default rate. Approximately one-third of hotel loans are securitized through CMBS, the remaining two-thirds rest on bank balance sheets. “At least a dozen hotels in Hampton Roads have already gone into receivership or foreclosure, and many more are on the brink.” says Edward Denton, Afton’s executive vice president. Denton said, “The issues impact all segments of the industry...we have helped lenders with everything from ‘mom and pop’ motels to upscale branded hotels.”
At the Colonial Inn, Afton’s team will assist the lender by providing day-to-day management oversight, addressing deferred maintenance, re-energizing the marketing efforts and preparing the property for a timely sale.
ABOUT THE COLONIAL INN
The Colonial Inn Motel has been an Outer Banks oceanfront destination since the 1950s. Many families have generations of memories associated with this property, and they continue to come back to enjoy the charm and nostalgia. The Colonial Inn offers a fantastic location, next to the Nags Head pier just minutes from Kill Devil Hills, and has several suites with full kitchens and oceanfront rooms that are literally footsteps from the oceanfront. All rooms have a microwave, coffee maker and refrigerator. Wireless Internet is available to guests in the lobby and on the outdoor pool deck.
ABOUT AFTON HOSPITALITY MANAGEMENT
Afton Hospitality Management is a hotel investment, consulting and management company that provides services to owners, investors and financial institutions. The principals have extensive experience in all aspects of hotel management, development and ownership, including Marriott, Hilton, Starwood, IHG, Choice and Wyndham branded, as well as independent properties in mid-Atlantic markets. The company’s services include lender consulting, full service property management, receivership, sales and market analysis, physical plant assessments, franchise negotiations and asset management.
Edward Denton, Executive Vice President
Afton Hospitality Management