Commercial Mortgage Capital

Goldman Sachs Commercial Mortgage Capital provides financing for a range of hotel property sizes and types. The following sets out the specific requirements for particular types of properties, as well as the requirements that apply to all hotel engagements.

Full-service hotels

Loan size: $10 million minimum
LTV: Up to 80% of MAI value
Amortization: 30 years
DSCR: Minimum 1.30x actual on 30-year amortization

Extended-stay hotels

Loan size: $10 million to $20 million
LTV: Up to 80% of MAI value
Amortization: 30 years
DSCR: Minimum 1.30x actual on 30-year amortization

Limited-service hotels

Loan size: $5 million to $20 million
LTV: Up to 75% of MAI value
Amortization: 25 years
DSCR: Minimum 1.30x actual on 25-year amortization

The following criteria apply to all hotel mortgage products, regardless of property size:

Pricing: Very competitive market-based pricing tied to LTV and DSCR. Contact your GSCMC representative.

Term: Up to 10 years

Markets: Primary and secondary markets, with a minimum of 250,000 residents; diverse demand drivers, with no single user 10% or greater

Minimum underwritten management fee: 4%. Management agreement to be subordinate to financing; lender has ability to terminate upon default

Deferred maintenance: 125% reserved at closing

Additional debt: None allowed

Minimum FF&E reserves: 4% of gross revenues; may require higher reserves for limited service hotels

Third-party reports: Appraisal, engineering, environmental will be required; Agreed-Upon-Procedures report may be required on case-by-case basis

Escrows: Taxes, insurance, ground lease payments, seasonality (as appropriate)

Leaseholds: Permitted, with minimum term extending thirty (30) years beyond final maturity of loan

Property age: Generally less than twenty (20) years

Franchise agreements: Should extend beyond loan term, or adequate reserves may be required to meet future PIP requirements related to extension

Underwriting: Operating history should include at least two (2) full trailing 12-month periods, in the industry-standard hotel reporting format (i.e., departmental revenues, departmental expenses, undistributed expenses, fixed charges). Additional required information includes Smith Travel Report, terms of franchise and management agreements, history of recent CAPEX, if any, and any required Product Improvement Plan (PIP) and CAPEX needs. Professional hotel management company with minimum of five (5) hotel properties under management.