Hotel Underwriting Tips
September 18, 2018 2:07pm
By Hans Detlefsen
As the owner of a hotel appraisal and advisory company, I get the opportunity to review hundreds of hotel appraisals, feasibility studies, investment pitch books, and offering memoranda each year. One of the things I’ve learned over the past two decades is that a few small changes in underwriting assumptions can greatly affect how hotel deals looks to investors. If these underwriting assumptions are not carefully considered, then they can represent big pitfalls for investors, appraisers, and others involved in the underwriting process.
The following is a list of 12 issues and pitfalls I encounter frequently. This is not intended to be a comprehensive list. But the items on this list often lead to significant flaws in hotel underwriting.
Hotel appraisers, investors, and underwriters typically must make decisions about dozens or hundreds of assumptions throughout the course of analyzing a single hotel deal. The preceding tips are intended to invite additional attention to certain assumptions and topics that frequently lead to flawed analyses. The author welcomes comments and feedback. This report is intended for discussion purposes only and is not intended to be construed as investment advice.
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hotel appraisers & advisors,
Hans Detlefsen, MPP, MAI, is President and Founder of Hotel Appraisers & Advisors, LLC. Hans has more than two decades of experience as a hotel appraiser, real estate consultant, and public policy advisor. His clients include major hotel corporations, real estate investment trusts (REITs), family offices, banks, brokers, investment funds, hotel owners, management companies, tourism agencies, nonprofit organizations, state and local governments, and private developers.
Mr. Detlefsen’s team is engaged in a wide range of assignments, such as feasibility studies, hotel appraisals, investment analysis, and advising boards of directors. He also provides expert testimony and litigation support for clients working on cases involving hotel valuation disputes.
Hans and his staff work in all 50 states and in several international markets. Mr. Detlefsen frequently speaks at conferences and private meetings. He has been quoted in numerous media and news sources.
Contact: Hans Detlefsen
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