Minibar and Loan Market Update from Bridge | Oct 25

My name is Rohit Mathur (and I typed this entire email, not chatgpt).  

I’m the cofounder and CEO of Bridge, a direct lender and marketplace for hotel loans, before founding Bridge I spent 10+ years at Citi in capital markets.

This is our first loan market update, these will be 100% focused on the current market trends, rates, terms and other observations from the deals we work on with owners, developers, lenders and brands.

So... here's the TLDR of for this month's Loan Market Update:  

1. Regional & Community Banks are re-engaged on hotel acquisition financing

2. Private Lenders continue to dominate ground-up construction loans

3. As rates go 📉 interest in equity investment (should) go 📈

The Lodging Conference is next week!

If you’re attending Lodging Conference: I’ll be wearing a very bright blue half zip and we have booth L2 in the foyer. If you want to meet in person, come by or schedule some time  

👉 Schedule a sit down

3 Key Loan Market Observations for September

1. Regional and Community Banks are selectively re-entering the lending market for acquisitions

• We have seen many regional banks increase lending to projects in their region – they are focusing on loans for acquisition and refinance; ground-up construction is still not a popular use of proceeds

• Banks are laser focused on in-place NOI and DSCR over 1.25x with a lot of scrutiny over PIPs

• We aren’t yet back to 2018 when community banks were the default source for hotel loans but we are seeing some banks selectively doing a few deals per quarter which is an improvement from 12 months ago – you still need to find the right bank at the right time

• Examples:

• Recently closed an $8.0 million - 80% LTV deal at 6.75% interest with 5-year maturity and 25-year amortization; acquisition of a Hilton flagged hotel; in-place debt service is 1.25x and the sponsor had done business with the bank before

• As I was typing this, we received a community bank term sheet at 6.25% interest with 5-year maturity and 20-year amortization; refinance of a Red Roof; in place debt service is 1 .25x, sponsor has no relationship with the bank

2. Private Lenders continue to be very active, especially in ground-up construction / heavy rehab

• We continue to see a lot of strong activity from private lenders / debt funds for ground-up / rehab deals

• With interest rate reductions and future rate hikes planned – the interest rate from these types of lenders is continuing to go down (most private lenders are currently in the 11.0% - 12.5% range for ground up hotels)

• Unlike banks, private lenders don’t have the deposit requirements, for developers with multiple projects, this means you can use your cash as equity on other deals (not all LTV’s are the same!)

• Examples:

• We recently closed a $15.0 million – 72.5% LTV deal at 11.5% interest with a 3-year maturity, interest only construction loan; ground up development of a Hilton flagged hotel; PF debt service coverage post stabilization is 1.30x and LTV as stabilized came out to 67%

• We currently have a term sheet out at 70% LTC deal at 11.5% interest with a 3-year maturity, interest only construction loan; ground up development of a Choice flagged hotel; PF debt service coverage post stabilization is 1.30x

3. With rates coming down, we expect to see a renewed interest in equity investment for hotels

• Deal economics, uncertain costs and flat to down rev par growth creates a murky equity story for investors

• That said, returns from Treasuries and CDs are also declining, which in turn increases demand for equities that can potentially offer higher returns compared to debt instruments.

• There is a renewed interest in the sub-$35 million dollar deal

Chart of the Month

View Interest Live Rates 👉 HERE

About Bridge

We are the first fintech focused on Hospitality loans and partner with Hilton, AAHOA, Choice, Red Roof and others. We’ve closed and funded $275.0 million+ in loans in 2025 (Our 1st full year of Hotel Lending) and we only have one goal

🎯 Simplifying access to competitive financing for your hotel loan.

5 FREE TOOLS TO HELP YOUR HOTEL PROJECT GET FUNDED

1. Five-click Pro Forma Generator - Link

2. C-PACE Calculator – determine if your project is CPACE eligible and how much you can get - Link

3. DSCR Calculator – does your deal cash flow - Link

4. Free Offering Memo - Have we generated an Offering Memorandum for you yet? We’ve built an OM for over 150 other projects in the past 3 months- get one now Link

5. Data Room – the cost of not having everything in one place is that lenders move on to the next deal – we’ve built a hospitality focused deal room (Want to see it? Just reply to this email and I'll give you a live demo)

Where will Bridge we be in October?

• Hilton Opening Doors Event – Oct 28th

• Thayer Investment Partners Conference – Oct 29th – 30th

Bridge Minibar Update 🍸 🍺

• Well stocked