Charleston, S.C. / Boca Raton, FL, September 26, 2023 — Montford Group has launched a program that provides rescue capital to hotel owners struggling with increasing borrowing, construction and operating costs.
The hotel investment firm is planning an initial investment of $50 million to $75 million, with capital coming from internal resources and a handful of partners. The initiative aims to produce value-added returns by offering preferred equity in increments of $5 million to $15 million. In keeping with Montford Group’s broader lodging-sector focus, the program will target hotel owners, though it may take on select investments in other asset classes as well.
The hotel sector has been on an upward trajectory as demand from corporate, group, international-travel and other segments regains momentum. But some owners — particularly those with maturing loans — still could face a cash crunch as the cost and availability of debt have made refinancing more challenging. Higher material and labor expenses have also increased the cost of construction and renovation projects, while some hotel owners face pressure from brand partners to move forward with improvements delayed during the pandemic.
“As hotel owners and developers ourselves, we understand the risks and opportunities when addressing some of these challenges,” said Krystal England, who signed on as Chief Investment Officer at Montford Group in June. “That gives us the ability to meet owners where they are and properly structure the capital.”
The program’s ability to target smaller check sizes, England added, allows it to reach an underserved segment of the market. “One of the benefits of our structure is flexibility in how we size and structure these investments,” she said.
Montford Group has some $1 billion of properties owned or under development, mainly in the hotel sector.
