The hospitality debt markets have been on an impressive tear in the first half of 2021, with spread tightening of 100 basis points to 200 basis points since January, according to JLL.
A bank deal that would have priced in the high 300 basis points/low 400 basis points in January, would price in the high 200 basis points/low 300 basis points today (and could be as low in the high 100 basis points/low 200 basis points for the highest quality deals); similarly, a debt fund deal that would have priced in the low-to-mid 500 basis points in January would price in the low-to-mid 300 basis points today.
Additionally, financing transaction volume has accelerated exponentially since the start of the year. JLL’s Hotel Investment Banking team is currently in the market with more than $5 billion of hotel financing product, which includes almost $1 billion of new financing engagements executed in the week prior to ALIS. Based on the amount of available liquidity and improving fund