OUR SERVICESREAL ESTATE

HOTEL AND TOURISM FINANCE

We advise in hospitality transactions:

a) Sale and purchase of hotels and similar lodging facilities

b) Financing purchase of or investment in hotels and similar lodging facilities

c) Financing construction and development of hotels and other lodging facilities

d) Sale, purchase, privatisation and financing destination spa and health spa facilities (sanus per aquam)

Our Hotel and hospitality finance expertise we combine with our Corporate finance services, M&A services and Real estate services. Here we elaborate the specific features of our services to hotel and hospitality finance.

Sale and purchase of hotels and hotel investment financing

Our core service in hospitality industry are hotel development and hotel investment finance. We have the necessary expertise and local and international contacts to undertake a hotel marketing and sale, from initial analyses to the necessary documentation preparation and successful sale or purchase execution. To hotel investors, in addition to the hotel acquisition advisory, we can assist them in raising the necessary funds for completion of the hotel acquisition and/or its reconstruction or redevelopment.

Services to hotel sellers

  • Comprehensive due diligence of the hotel being sold,
  • Analysis of the hotel operating metrics
  • Hotel valuation
  • Asking price determination
  • Drafting usual documentation for marketing the project to investors-teaser, sales memorandum etc
  • Contacts with hotel investors utilising our global distribution network of over 100 corresponding offices worldwide
  • Direct contacts with financial and strategic hotel investors worldwide
  • Support in negotiations, offers evaluation and general advisory until the successful sale of the hotel

Services to hotel investors

  • Identification of the best acquisition targets
  • Due diligence analysis of the intended purchase
  • Analysis of the hotel operating metrics
  • Preparation of proforma cash flow projections as well as projections of future Income Statements, Balance Sheet and other elements of annual financial performance projections
  • Investment risk analysis - scenario analysis, sensitivity analysis, break-even, time series, Monte Carlo simulation, regression analysis
  • Discounted Cash Flow Analysis
  • Business or investment plan preparation for hotel investors as borrowers to raise debt capital locally or internationally for purchase and/or hotel redevelopment or reconstruction
  • Acquisition fund structure (equity, debt, mezzanine) and cost modelling,
  • Debt Service Coverage Ratio (DSCR), Debt Service Reserve Account (DSRA), Maintenance Reserve Account (MRA) analysis and modelling
  • Hotel valuation
  • Tax efficient investment and funding structure
  • Calculation of hotel investment metrics - equity multiple, IRR, NPV, key financial ratios,-liquidity, leverage and profitability
  • Optimal holding period analysis to maximise investment return
  • Bid price determination
  • Drafting usual documentation for lenders or other sources of acquisition finance
  • Contacting lenders and other sources of debt or hybrid capital finance
  • Support in purchase and/or capital raising negotiations until successful completion
  • Hotel investment exit strategy

Hotel refinancing services

The need for hotel refinancing may occur in several likely situations.

  • When a newly developed hotel needs to refinance its short-term construction loan with a mini perm (bridging) loan or a long-term permanent loan
  • Refinancing of the existing loan with a loan under better terms and conditions (extension of the repayment period, extension of the grace period, lower interest rates, renegotiation of the restrictive loan covenants etc)
  • Refinancing of the existing debt burden with convertible loans or equity capital to mitigate the possibility of debt service default

Hotel development services

We offer a range of comprehensive services to hotel developers or investors in new hotel development ventures. In our analysis, the usual starting point is the feasibility study or market research study, whatever is available. It is utmost essential to understand and analyse the entire funding needs of the hotel development in all its phases-from land acquisition to construction, pre-operating expenses and stabilising period and subsequent financial performance since they are all relevant for debt funding repayment and equity funding profit returns.

  • Comprehensive due diligence of the proposed hotel development
  • Business/investment plan preparation for the intended hotel development
  • Preparation of the hotel development funding model- for financing construction, pre-opening expenses and stabilising years operational shortfall funding
  • Analysis of the hotel investment metrics - equity multiple, IRR, NPV, key financial ratios-liquidity, leverage, profitability and other project development ratios and other project statistics
  • Project or investment risk analysis - scenario analysis, sensitivity analysis, break-even, time series, Monte Carlo simulation, regression analysis
  • Preparation of the financial projections for the intended hotel development
  • Hotel project proforma (cash flow projections) preparation
  • Discounted Cash Flow Analysis
  • Sources (equity, debt or hybrid capital) and uses of funds statement preparation
  • Tax efficient investment and funding structure
  • Risk allocation and risk adjusted returns
  • Joint venture profit distribution waterfall modelling based on IRR level, investor equity multiple and a residual cash flow split criteria
  • Capital costs modelling
  • Project finance debt sizing and sculpting
  • S curve modelling
  • Construction budget, construction funds sources and uses
  • Debt Service Coverage Ratio (DSCR), Debt Service Reserve Account (DSRA), Maintenance Reserve Account (MRA) analysis and modelling
  • Short term [construction] financing, long term permanent financing, mini-perm loan (bridge loans)
  • Junior loan, senior loan, mezzanine
  • Construction loans and RE investment loans
  • Drafting usual documentation for marketing the project to investors or lenders-teaser, offering memorandum, term sheet proposal,
  • Term sheet interpretation and negotiation with lenders, offer (binding commitment letter) negotiation assistance
  • Recourse and non-recourse finance, terms and conditions under which a non-recourse converts to a recourse loan (“bad behaviour” clauses) negotiation support
  • All other necessary support until the successful financial construction of the intended development closing

Sale, purchase, privatisation and financing destination spa and health spa facilities (sanus per aquam)

Services to privatisation, acquisition or investment in spa destination centres is a part of our Hotel and Hospitality finance which we combine with our Corporate finance services, M&A services and Privatisation services. Here we elaborate the specific features of our services to spa destination privatisation and investments.

  • Identification of the acquisition targets
  • Due diligence analysis of the intended purchase
  • Analysis of the destination spa operating metrics
  • Preparation of suitable business model for future operation of the spa destination centre
  • Analysis of future capital investment needs (capex), operating capital needs (opex), budgeting (operating and continuous),
  • In privatisation-preparation of a social programme, investment program and meeting other requirements, terms and conditions set out in the privatisation process, dealing with the privatisation authority and their consultants, preparation of the privatisation bid
  • Preparation of proforma cash flow projections as well as projections of future Income Statements, Balance Sheet and other elements of annual financial performance projections
  • Investment risk analysis - scenario analysis, sensitivity analysis, break-even, time series, Monte Carlo simulation, regression analysis
  • Discounted Cash Flow Analysis
  • Business or investment plan preparation for the spa investors as borrowers to raise debt capital locally or internationally for purchase and/or the spa destination redevelopment or reconstruction
  • Acquisition fund structure (equity, debt, mezzanine) and cost modelling,
  • Debt Service Coverage Ratio (DSCR), Debt Service Reserve Account (DSRA), Maintenance Reserve Account (MRA) analysis and modelling
  • Destination spa valuation
  • Tax efficient investment and funding structure
  • Calculation of destination spa investment metrics - equity multiple, IRR, NPV, key financial ratios,-liquidity, leverage and profitability
  • Optimal holding period analysis to maximise investment return
  • Offer price determination
  • Drafting usual documentation for lenders or other sources of acquisition finance
  • Contacting lenders and other sources of debt of hybrid capital finance
  • Support in purchase and/or capital raising negotiations until successful completion Investment exit strategy

More about privatisation and investment in spa centres you will find in our post Privatisation of destination spa centres and health spa facilities (sanus per aquam) in Serbia.

More about investment opportunities in spa destination centres you will find in our Business opportunities.

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