Hotel bridge loans in Pennsylvania

What Pennsylvania means for a bridge lender

Pennsylvania is a judicial foreclosure state, and Philadelphia and Pittsburgh have their own procedures and timelines. Lenders weigh those when sizing loans.

Foreclosure runs through the courts, which usually takes longer and costs more than a power-of-sale process. Lenders that size loans on the property, not the borrower, price that time in: some reduce leverage, some ask for larger interest reserves, and some only lend in judicial states on stronger assets.

Hotel and motel specifics

Hotel lenders focus on local demand drivers, seasonality and new supply in the specific submarket, and some only lend on flagged hotels or in markets with year-round demand.

How hotel and motel bridge loans are sized

Hotels are business-dependent assets, so asset-based bridge lenders usually lend at lower leverage than they would on stabilized multifamily, often in the 50–65% of as-is value range for straightforward deals. When there is a PIP or renovation budget, many lenders size on loan-to-cost and fund the improvements through a holdback released as work is completed. Appraisals for hotels typically separate the going-concern value (real estate plus business, FF&E and flag) from the real estate alone, and conservative lenders lean on the lower real estate number. A strong flag with a long remaining franchise term generally supports better terms than an independent or off-brand property.

What lenders will ask for

• Trailing 12-month and year-to-date P&L, plus prior two years
• STR reports (trailing and competitive set)
• Franchise agreement and any amendments
• Property improvement plan (PIP) and contractor bids
• Management agreement and manager resume
• Rent roll or room mix summary and any long-term group or lease agreements

Full list and timeline on the hotel bridge loans page.