What institutions are providing refinance debt right now?

Editor’s note: Based on our perception of the increased volume of hotel refinances over the past few months, Hotel Investment Today asked several brokers and debt players about the state of the market. This is part 4 of a recurring series that features Joe O’Loughlin of HREC Investment Advisors and Jared Schlosser of Peachtree Group. Click here for Part 1. Click here for Part 2. Click here for Part 3.

NATIONAL REPORT — Because of the economic turmoil over the past few months, bank lenders remain cautious and take the long view, according to a hospitality lending expert. They will even be “looking at new deals” for the right customers.

Joe O' Loughlin

“I have discussed my deals with three national and three regional banks,” said Joe O’Loughlin, senior vice president for Greenwood Village, Colorado-based HREC Investment Advisors, who was working on several deals when he spoke with Hotel Investment Today in late April. He said four banks are interested and continue to submit questions and request additional information. “The banks are focused on strong, durable cash flow, renovation requirements and proven brands.”

Jared Schlosser, head of hotel originations and CPACE for Atlanta-based Peachtree Group, a private credit lender and investor in the hospitality space, said private capital is currently the most active in the debt market.

With regional banks still hesitant, CMBS constrained by higher debt yield requirements, and many traditional lenders sitting on the sidelines, he said private lenders have stepped in to fill the void, particularly for transitional and special-situation assets… "[For] 2025, we expect private capital to continue gaining share, especially as more refinances come due and the acquisition volume starts to thaw.”

Hotel Investment Today asked O’Loughlin and Schlosser about the number of refinance deals happening right now and why some financing fails.

Hotel Investment Today (HIT): Have you completed more refinances in the first 3.5 months of 2025 than in the same period in 2024?

Jared Schlosser: The majority of our transactions in 2024, and nearly all so far in 2025, have been refinances. The acquisition market has yet to recover, while the significant wave of refinancing activity continues.

HIT: What does the typical debt stack look like today on refinances?

Schlosser: We generally go up to 70% of the capital stack.

HIT: What are the biggest reasons refi deals fail?

Jared Schlosser

Schlosser: There are many inexperienced hotel lenders in the market right now that do not regularly lend on hospitality assets. They’re signing up deals in a volatile environment and then struggling to execute. We’ve been fielding a ton of calls on transactions where the original refinance lender backed out and couldn’t close.

HIT: What entities are most active in the debt market right now?

Joe O’Loughlin: Debt fund lenders remain engaged and have gotten more aggressive to compete with balance sheet banks, which have become increasingly active in the market. The debt fund lenders are closely watching their leveraged cost of capital and adjusting pricing accordingly. The three debt fund lenders I spoke with view the disruption as an opportunity and remain active in the market. Cash-flowing deals have options at higher leverage points (i.e., 70% LTV).

The CMBS market is experiencing disruption and spreads are widening with an average quoted spread increase of 50 basis points… CMBS underwriters are encouraging borrowers to complete the application process (30 days), take a longer view and be in a position to lock if rates come down. CMBS pricing will continue to be volatile and subject to upward and downward swings in the market.

HIT: What is the main reason for most of the refis you are seeing?

Schlosser: The primary reasons are loan maturities, CMBS lenders increasing debt yield requirements from 10% to 12%, creating a financing gap and a stalled acquisition market.

HIT: Can you offer an example of a typical (or atypical) deal with rate structure/terms for a recently closed refi?

Schlosser: We recently closed a 70% LTV refinance at SOFR + 5%.